As of June 4, 2025, Estee Lauder Companies Inc has a Discounted Cash Flow (DCF) derived fair value of $82.28 per share. With the current market price at $68.93, this represents a potential upside of 19.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $79.28 |
| DCF Fair Value (10-year) | $82.28 |
| Potential Upside (5-year) | 15.0% |
| Potential Upside (10-year) | 19.4% |
| Discount Rate (WACC) | 6.2% - 8.4% |
Revenue is projected to grow from $15609 million in 06-2024 to $18942 million by 06-2034, representing a compound annual growth rate of approximately 2.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 06-2024 | 15609 | 2% |
| 06-2025 | 14536 | -7% |
| 06-2026 | 14872 | 2% |
| 06-2027 | 15279 | 3% |
| 06-2028 | 15584 | 2% |
| 06-2029 | 16307 | 5% |
| 06-2030 | 16633 | 2% |
| 06-2031 | 16966 | 2% |
| 06-2032 | 18196 | 7% |
| 06-2033 | 18560 | 2% |
| 06-2034 | 18942 | 2% |
Net profit margin is expected to improve from 3% in 06-2024 to 9% by 06-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 06-2024 | 409 | 3% |
| 06-2025 | 669 | 5% |
| 06-2026 | 829 | 6% |
| 06-2027 | 993 | 6% |
| 06-2028 | 1149 | 7% |
| 06-2029 | 1339 | 8% |
| 06-2030 | 1392 | 8% |
| 06-2031 | 1446 | 9% |
| 06-2032 | 1580 | 9% |
| 06-2033 | 1640 | 9% |
| 06-2034 | 1702 | 9% |
with a 5-year average of $1302 million. Projected CapEx is expected to maintain at approximately 8% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 06-2025 | 1414 |
| 06-2026 | 1528 |
| 06-2027 | 1569 |
| 06-2028 | 1164 |
| 06-2029 | 1246 |
| 06-2030 | 1280 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 36 |
| Days Inventory | 222 |
| Days Payables | 136 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2025 | 634 | 64 | 296 | (29) | 303 |
| 2026 | 2876 | 318 | 1210 | 13 | 1335 |
| 2027 | 3148 | 380 | 1243 | (7) | 1532 |
| 2028 | 2965 | 440 | 1268 | 20 | 1237 |
| 2029 | 3318 | 513 | 1327 | 68 | 1411 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 79.28 | 15.0% |
| 10-Year DCF (Growth) | 82.28 | 19.4% |
| 5-Year DCF (EBITDA) | 42.45 | -38.4% |
| 10-Year DCF (EBITDA) | 51.52 | -25.3% |
Is Estee Lauder Companies Inc (EL) a buy or a sell? Estee Lauder Companies Inc is definitely a buy. Based on our DCF analysis, Estee Lauder Companies Inc (EL) appears to be moderately undervalued with upside potential of 19.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $68.93.