Intrinsic value of Estee Lauder Cl A - EL

Previous Close

$108.80

  Intrinsic Value

$79.67

stock screener

  Rating & Target

sell

-27%

  Value-price divergence*

+35%

Previous close

$108.80

 
Intrinsic value

$79.67

 
Up/down potential

-27%

 
Rating

sell

 
Value-price divergence*

+35%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 40.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.99
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.82
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
Revenue, $m
  11,824
  12,935
  14,094
  15,302
  16,557
  17,863
  19,221
  20,631
  22,097
  23,620
  25,204
  26,851
  28,564
  30,347
  32,204
  34,138
  36,154
  38,257
  40,450
  42,740
  45,131
  47,629
  50,240
  52,970
  55,825
  58,812
  61,938
  65,211
  68,638
  72,228
  75,990
Variable operating expenses, $m
 
  11,047
  12,037
  13,068
  14,140
  15,255
  16,414
  17,619
  18,871
  20,172
  21,524
  22,930
  24,394
  25,916
  27,502
  29,154
  30,876
  32,671
  34,545
  36,500
  38,542
  40,675
  42,905
  45,236
  47,674
  50,225
  52,895
  55,690
  58,617
  61,683
  64,895
Fixed operating expenses, $m
 
  35
  36
  37
  38
  38
  39
  40
  41
  42
  44
  45
  46
  47
  48
  49
  50
  52
  53
  54
  56
  57
  59
  60
  61
  63
  65
  66
  68
  70
  71
Total operating expenses, $m
  10,132
  11,082
  12,073
  13,105
  14,178
  15,293
  16,453
  17,659
  18,912
  20,214
  21,568
  22,975
  24,440
  25,963
  27,550
  29,203
  30,926
  32,723
  34,598
  36,554
  38,598
  40,732
  42,964
  45,296
  47,735
  50,288
  52,960
  55,756
  58,685
  61,753
  64,966
Operating income, $m
  1,692
  1,854
  2,022
  2,197
  2,380
  2,570
  2,767
  2,972
  3,185
  3,406
  3,636
  3,876
  4,125
  4,384
  4,654
  4,935
  5,228
  5,534
  5,853
  6,186
  6,533
  6,897
  7,276
  7,674
  8,089
  8,523
  8,978
  9,455
  9,953
  10,476
  11,023
EBITDA, $m
  2,107
  2,066
  2,253
  2,448
  2,651
  2,863
  3,082
  3,310
  3,547
  3,793
  4,050
  4,316
  4,593
  4,881
  5,182
  5,495
  5,821
  6,161
  6,516
  6,887
  7,274
  7,678
  8,100
  8,542
  9,004
  9,488
  9,994
  10,524
  11,079
  11,660
  12,269
Interest expense (income), $m
  79
  118
  141
  165
  190
  216
  243
  271
  300
  331
  362
  395
  429
  464
  501
  539
  579
  621
  664
  710
  757
  806
  858
  912
  968
  1,027
  1,089
  1,154
  1,221
  1,292
  1,366
Earnings before tax, $m
  1,617
  1,735
  1,881
  2,032
  2,190
  2,353
  2,524
  2,700
  2,884
  3,075
  3,274
  3,481
  3,696
  3,920
  4,153
  4,395
  4,649
  4,913
  5,188
  5,476
  5,776
  6,090
  6,418
  6,762
  7,121
  7,496
  7,889
  8,301
  8,732
  9,184
  9,657
Tax expense, $m
  361
  469
  508
  549
  591
  635
  681
  729
  779
  830
  884
  940
  998
  1,058
  1,121
  1,187
  1,255
  1,326
  1,401
  1,478
  1,560
  1,644
  1,733
  1,826
  1,923
  2,024
  2,130
  2,241
  2,358
  2,480
  2,607
Net income, $m
  1,249
  1,267
  1,373
  1,483
  1,598
  1,718
  1,842
  1,971
  2,106
  2,245
  2,390
  2,541
  2,698
  2,861
  3,031
  3,209
  3,394
  3,586
  3,787
  3,997
  4,217
  4,446
  4,685
  4,936
  5,198
  5,472
  5,759
  6,060
  6,374
  6,704
  7,050

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,741
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,568
  10,753
  11,716
  12,719
  13,763
  14,849
  15,977
  17,150
  18,368
  19,634
  20,951
  22,320
  23,744
  25,226
  26,770
  28,378
  30,053
  31,801
  33,625
  35,528
  37,515
  39,592
  41,762
  44,031
  46,404
  48,888
  51,486
  54,207
  57,056
  60,040
  63,167
Adjusted assets (=assets-cash), $m
  9,827
  10,753
  11,716
  12,719
  13,763
  14,849
  15,977
  17,150
  18,368
  19,634
  20,951
  22,320
  23,744
  25,226
  26,770
  28,378
  30,053
  31,801
  33,625
  35,528
  37,515
  39,592
  41,762
  44,031
  46,404
  48,888
  51,486
  54,207
  57,056
  60,040
  63,167
Revenue / Adjusted assets
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
  1.203
Average production assets, $m
  964
  1,061
  1,156
  1,255
  1,358
  1,465
  1,576
  1,692
  1,812
  1,937
  2,067
  2,202
  2,342
  2,488
  2,641
  2,799
  2,965
  3,137
  3,317
  3,505
  3,701
  3,906
  4,120
  4,343
  4,578
  4,823
  5,079
  5,347
  5,628
  5,923
  6,231
Working capital, $m
  2,141
  647
  705
  765
  828
  893
  961
  1,032
  1,105
  1,181
  1,260
  1,343
  1,428
  1,517
  1,610
  1,707
  1,808
  1,913
  2,023
  2,137
  2,257
  2,381
  2,512
  2,648
  2,791
  2,941
  3,097
  3,261
  3,432
  3,611
  3,799
Total debt, $m
  3,572
  4,040
  4,724
  5,437
  6,178
  6,949
  7,750
  8,582
  9,447
  10,346
  11,281
  12,253
  13,264
  14,317
  15,412
  16,554
  17,744
  18,985
  20,279
  21,631
  23,042
  24,516
  26,057
  27,668
  29,353
  31,116
  32,961
  34,893
  36,916
  39,035
  41,254
Total liabilities, $m
  7,166
  7,634
  8,318
  9,031
  9,772
  10,543
  11,344
  12,176
  13,041
  13,940
  14,875
  15,847
  16,858
  17,911
  19,006
  20,148
  21,338
  22,579
  23,873
  25,225
  26,636
  28,110
  29,651
  31,262
  32,947
  34,710
  36,555
  38,487
  40,510
  42,629
  44,848
Total equity, $m
  4,402
  3,118
  3,398
  3,689
  3,991
  4,306
  4,633
  4,973
  5,327
  5,694
  6,076
  6,473
  6,886
  7,316
  7,763
  8,229
  8,716
  9,222
  9,751
  10,303
  10,879
  11,482
  12,111
  12,769
  13,457
  14,177
  14,931
  15,720
  16,546
  17,412
  18,318
Total liabilities and equity, $m
  11,568
  10,752
  11,716
  12,720
  13,763
  14,849
  15,977
  17,149
  18,368
  19,634
  20,951
  22,320
  23,744
  25,227
  26,769
  28,377
  30,054
  31,801
  33,624
  35,528
  37,515
  39,592
  41,762
  44,031
  46,404
  48,887
  51,486
  54,207
  57,056
  60,041
  63,166
Debt-to-equity ratio
  0.811
  1.300
  1.390
  1.470
  1.550
  1.610
  1.670
  1.730
  1.770
  1.820
  1.860
  1.890
  1.930
  1.960
  1.990
  2.010
  2.040
  2.060
  2.080
  2.100
  2.120
  2.140
  2.150
  2.170
  2.180
  2.190
  2.210
  2.220
  2.230
  2.240
  2.250
Adjusted equity ratio
  0.271
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,249
  1,267
  1,373
  1,483
  1,598
  1,718
  1,842
  1,971
  2,106
  2,245
  2,390
  2,541
  2,698
  2,861
  3,031
  3,209
  3,394
  3,586
  3,787
  3,997
  4,217
  4,446
  4,685
  4,936
  5,198
  5,472
  5,759
  6,060
  6,374
  6,704
  7,050
Depreciation, amort., depletion, $m
  415
  212
  231
  251
  272
  293
  315
  338
  362
  387
  413
  440
  468
  498
  528
  560
  593
  627
  663
  701
  740
  781
  824
  869
  916
  965
  1,016
  1,069
  1,126
  1,185
  1,246
Funds from operations, $m
  2,014
  1,479
  1,604
  1,734
  1,870
  2,011
  2,157
  2,310
  2,468
  2,632
  2,803
  2,981
  3,166
  3,359
  3,560
  3,769
  3,986
  4,214
  4,451
  4,698
  4,957
  5,227
  5,509
  5,805
  6,113
  6,437
  6,775
  7,129
  7,500
  7,889
  8,296
Change in working capital, $m
  225
  56
  58
  60
  63
  65
  68
  71
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  110
  114
  120
  125
  131
  136
  143
  149
  156
  164
  171
  179
  188
Cash from operations, $m
  1,789
  1,423
  1,546
  1,674
  1,807
  1,946
  2,090
  2,239
  2,395
  2,556
  2,724
  2,899
  3,081
  3,270
  3,467
  3,672
  3,886
  4,109
  4,341
  4,584
  4,837
  5,102
  5,379
  5,668
  5,971
  6,287
  6,619
  6,965
  7,329
  7,709
  8,108
Maintenance CAPEX, $m
  0
  -193
  -212
  -231
  -251
  -272
  -293
  -315
  -338
  -362
  -387
  -413
  -440
  -468
  -498
  -528
  -560
  -593
  -627
  -663
  -701
  -740
  -781
  -824
  -869
  -916
  -965
  -1,016
  -1,069
  -1,126
  -1,185
New CAPEX, $m
  -525
  -97
  -95
  -99
  -103
  -107
  -111
  -116
  -120
  -125
  -130
  -135
  -140
  -146
  -152
  -159
  -165
  -172
  -180
  -188
  -196
  -205
  -214
  -224
  -234
  -245
  -256
  -268
  -281
  -294
  -308
Cash from investing activities, $m
  -1,269
  -290
  -307
  -330
  -354
  -379
  -404
  -431
  -458
  -487
  -517
  -548
  -580
  -614
  -650
  -687
  -725
  -765
  -807
  -851
  -897
  -945
  -995
  -1,048
  -1,103
  -1,161
  -1,221
  -1,284
  -1,350
  -1,420
  -1,493
Free cash flow, $m
  520
  1,134
  1,239
  1,344
  1,453
  1,567
  1,685
  1,808
  1,936
  2,069
  2,207
  2,351
  2,500
  2,655
  2,817
  2,985
  3,160
  3,343
  3,534
  3,733
  3,940
  4,157
  4,384
  4,620
  4,868
  5,127
  5,398
  5,681
  5,978
  6,289
  6,615
Issuance/(repayment) of debt, $m
  608
  657
  684
  712
  741
  771
  801
  832
  865
  899
  935
  972
  1,011
  1,052
  1,096
  1,142
  1,190
  1,241
  1,295
  1,351
  1,411
  1,474
  1,541
  1,611
  1,685
  1,763
  1,845
  1,932
  2,023
  2,119
  2,220
Issuance/(repurchase) of shares, $m
  -890
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -182
  657
  684
  712
  741
  771
  801
  832
  865
  899
  935
  972
  1,011
  1,052
  1,096
  1,142
  1,190
  1,241
  1,295
  1,351
  1,411
  1,474
  1,541
  1,611
  1,685
  1,763
  1,845
  1,932
  2,023
  2,119
  2,220
Total cash flow (excl. dividends), $m
  316
  1,791
  1,923
  2,056
  2,194
  2,338
  2,486
  2,641
  2,801
  2,968
  3,142
  3,323
  3,511
  3,708
  3,913
  4,127
  4,350
  4,584
  4,828
  5,084
  5,351
  5,631
  5,924
  6,231
  6,553
  6,890
  7,243
  7,613
  8,001
  8,408
  8,835
Retained Cash Flow (-), $m
  -830
  -268
  -279
  -291
  -303
  -315
  -327
  -340
  -353
  -367
  -382
  -397
  -413
  -430
  -448
  -466
  -486
  -507
  -529
  -552
  -576
  -602
  -629
  -658
  -688
  -720
  -754
  -789
  -826
  -865
  -907
Prev. year cash balance distribution, $m
 
  1,552
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,075
  1,644
  1,765
  1,892
  2,023
  2,159
  2,301
  2,448
  2,601
  2,760
  2,926
  3,098
  3,278
  3,465
  3,660
  3,864
  4,077
  4,300
  4,532
  4,775
  5,029
  5,295
  5,573
  5,865
  6,170
  6,489
  6,824
  7,175
  7,542
  7,928
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  2,948
  1,505
  1,536
  1,558
  1,568
  1,567
  1,554
  1,530
  1,494
  1,447
  1,389
  1,322
  1,246
  1,163
  1,075
  982
  887
  792
  698
  607
  520
  439
  365
  299
  240
  189
  146
  111
  82
  60
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The Estee Lauder Companies Inc. manufactures and markets skin care, makeup, fragrance and hair care products. The Company offers products, including skin care, makeup, fragrance, hair care and other. The Company operates in beauty products segment. The Company's products are sold in over 150 countries and territories under brand names, including Estee Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, Tommy Hilfiger, MAC, Kiton, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford, Smashbox, Ermenegildo Zegna, AERIN, Tory Burch, RODIN olio lusso, Le Labo, Editions de Parfums Frederic Malle, GLAMGLOW, By Kilian, BECCA and Too Faced. Its skin care products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks, cleansing devices and sun care products.

FINANCIAL RATIOS  of  Estee Lauder Cl A (EL)

Valuation Ratios
P/E Ratio 32
Price to Sales 3.4
Price to Book 9.1
Price to Tangible Book
Price to Cash Flow 22.4
Price to Free Cash Flow 31.7
Growth Rates
Sales Growth Rate 5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11%
Cap. Spend. - 3 Yr. Gr. Rate 2.6%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 76.9%
Total Debt to Equity 81.1%
Interest Coverage 21
Management Effectiveness
Return On Assets 12.6%
Ret/ On Assets - 3 Yr. Avg. 13.3%
Return On Total Capital 18.1%
Ret/ On T. Cap. - 3 Yr. Avg. 19.7%
Return On Equity 31.3%
Return On Equity - 3 Yr. Avg. 30.4%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 79.4%
Gross Margin - 3 Yr. Avg. 80.2%
EBITDA Margin 17.9%
EBITDA Margin - 3 Yr. Avg. 18.2%
Operating Margin 14.3%
Oper. Margin - 3 Yr. Avg. 14.5%
Pre-Tax Margin 13.7%
Pre-Tax Margin - 3 Yr. Avg. 14%
Net Profit Margin 10.6%
Net Profit Margin - 3 Yr. Avg. 10.2%
Effective Tax Rate 22.3%
Eff/ Tax Rate - 3 Yr. Avg. 26.7%
Payout Ratio 33.9%

EL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EL stock intrinsic value calculation we used $11824 million for the last fiscal year's total revenue generated by Estee Lauder Cl A. The default revenue input number comes from 2017 income statement of Estee Lauder Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EL stock valuation model: a) initial revenue growth rate of 9.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for EL is calculated based on our internal credit rating of Estee Lauder Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Estee Lauder Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EL stock the variable cost ratio is equal to 85.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $34 million in the base year in the intrinsic value calculation for EL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Estee Lauder Cl A.

Corporate tax rate of 27% is the nominal tax rate for Estee Lauder Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EL are equal to 8.2%.

Life of production assets of 3.8 years is the average useful life of capital assets used in Estee Lauder Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EL is equal to 5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4402 million for Estee Lauder Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 369.577 million for Estee Lauder Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Estee Lauder Cl A at the current share price and the inputted number of shares is $40.2 billion.

RELATED COMPANIES Price Int.Val. Rating
COTY Coty Cl A 15.85 483.37  str.buy
AVP Avon Products 2.28 0.33  str.sell
REV Revlon Cl A 22.25 54.10  str.buy
IPAR Inter Parfums 42.30 34.40  hold
PG Procter&Gamble 88.25 66.01  sell

COMPANY NEWS

▶ Estee Lauder Faces Further Sideways Action   [10:41AM  TheStreet.com]
▶ Were We Too Bullish on Estee Lauder?   [12:22PM  TheStreet.com]
▶ Estée Lauder Chairman on Breast Cancer Campaign   [Oct-10-17 06:10AM  Bloomberg Video]
▶ Spiros Segalas Picks Up 5 New Stocks in 3rd Quarter   [Oct-02-17 02:00PM  GuruFocus.com]
▶ Estee Lauder's Sitting Pretty   [07:00AM  Morningstar]
▶ Estée Lauder's New CIO To Expand Analytics, Social Media Use   [Sep-29-17 02:41PM  The Wall Street Journal]
▶ 5 ways to trade extreme stocks   [Sep-20-17 05:00PM  CNBC Videos]
▶ Should You Buy The Estée Lauder Companies Inc (EL)?   [Sep-11-17 01:09PM  Simply Wall St.]
▶ Federal agency: Estee Lauder discriminates against new dads   [Aug-31-17 03:42PM  Associated Press]
▶ No Slowing Down This Cosmetics Retailer   [01:23PM  GuruFocus.com]
▶ [$$] New Fathers Should Get Same Paid Leave as New Mothers, EEOC Claims   [Aug-30-17 09:15PM  The Wall Street Journal]
▶ M&A On The Way In The Beauty Industry?   [Aug-29-17 09:52AM  Barrons.com]
▶ Estee Lauder Not For Sale: The Math   [Aug-28-17 05:18PM  Barrons.com]
▶ Estee Lauder Executives Shoot Down Sale Talk   [09:36AM  TheStreet.com]
▶ [$$] Estée Lauder Tells Workers It Isn't For Sale   [08:10AM  The Wall Street Journal]
▶ For Unilever, Estee Lauder's Not Just a Pretty Face   [Aug-25-17 12:01PM  Bloomberg]
▶ Estee Lauder tops Street 4Q forecasts   [Aug-18-17 09:00PM  Associated Press]
Financial statements of EL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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