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Estee Lauder (EL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Estee Lauder (EL) closed at $182.59 in the latest trading session, marking a +1.69% move from the prior day. This move outpaced the S&P 500's daily gain of 0.08%. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, added 0.38%.

Heading into today, shares of the beauty products company had lost 2.36% over the past month, lagging the Consumer Staples sector's loss of 2.1% and outpacing the S&P 500's loss of 3.57% in that time.

EL will be looking to display strength as it nears its next earnings release, which is expected to be August 19, 2019. The company is expected to report EPS of $0.52, down 14.75% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.51 billion, up 6.62% from the year-ago period.

It is also important to note the recent changes to analyst estimates for EL. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.42% higher. EL currently has a Zacks Rank of #2 (Buy).

Digging into valuation, EL currently has a Forward P/E ratio of 31. Its industry sports an average Forward P/E of 25.02, so we one might conclude that EL is trading at a premium comparatively.

Meanwhile, EL's PEG ratio is currently 2.39. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. EL's industry had an average PEG ratio of 2.97 as of yesterday's close.

The Cosmetics industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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