If you are wondering whether Estée Lauder Companies is finally a bargain or just a value trap at a lower price, this breakdown will walk through what the numbers are really telling us about the stock.
After a deep multi year slump, the shares have bounced sharply, with the price up 11.8% over the last week, 19.8% in a month, and 42.1% year to date, although the 3 year and 5 year returns of 53.8% and 54.0% are still well underwater.
Recently, investors have been watching management’s strategic reset and moves to streamline the portfolio and refocus on higher margin brands, alongside ongoing recovery expectations in key travel retail and premium beauty markets. Together, these developments have shifted sentiment from pure pessimism to cautious optimism and have helped fuel the latest rebound.
Despite that rally, our valuation checks only score Estée Lauder at 1/6, which means it screens as undervalued on just one of six metrics we track. Next, we will look at those different valuation approaches and, towards the end, explore an even more holistic way to think about what this business might really be worth.
Estée Lauder Companies scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back to today’s dollars.
For Estée Lauder Companies, the latest twelve month Free Cash Flow is about $0.82 billion. Analyst forecasts and subsequent extrapolations by Simply Wall St point to Free Cash Flow rising to roughly $2.0 billion by 2030, with interim projections stepping up steadily over the next decade. These projections are based on a 2 Stage Free Cash Flow to Equity approach that blends near term analyst expectations with longer term, slowing growth assumptions.
Combining all those discounted cash flows results in an estimated intrinsic value of about $106.22 per share. Compared to the current share price, this implies the stock is only about 1.0% undervalued, which is effectively in line with where the market is pricing it today.
Result: ABOUT RIGHT
Estée Lauder Companies is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.
EL Discounted Cash Flow as at Dec 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Estée Lauder Companies.
For consumer brands like Estée Lauder Companies, revenue-based metrics are often more useful than earnings because sales are less affected by one-off costs and margin swings. The Price to Sales ratio shows how much investors are willing to pay for each dollar of revenue, which makes it a reasonable yardstick for a profitable, established beauty business.
In general, faster, more resilient growth and lower perceived risk justify a higher multiple, while slower or more volatile growth supports a discount. Estée Lauder Companies currently trades on a Price to Sales multiple of 2.62x, which is above both the wider Personal Products industry average of 0.96x and the peer group average of 1.95x. On the surface, that suggests a premium valuation.
Simply Wall St’s Fair Ratio framework goes a step further by estimating what a “normal” Price to Sales multiple should be after accounting for factors like earnings growth, profit margins, industry, market cap and company-specific risks. For Estée Lauder Companies, that Fair Ratio is 2.26x, modestly below the current 2.62x. This indicates the shares are trading richer than what those fundamentals would typically support.
Result: OVERVALUED
NYSE:EL PS Ratio as at Dec 2025
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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple, story driven forecasts where you spell out how you think a business like Estée Lauder Companies will grow, translate that view into revenue, earnings and margin estimates, and then see what fair value those assumptions imply. On Simply Wall St’s Community page, millions of investors use Narratives to connect a company’s story to a set of numbers, turning their expectations about things like digital expansion, luxury fragrance growth, or ongoing restructuring risks into a concrete valuation they can compare with today’s share price to help inform a decision. Because Narratives update dynamically when fresh information arrives, such as new earnings, product launches or macro news, your fair value view evolves automatically instead of going stale. For Estée Lauder Companies, one investor might build a Narrative closer to $120 per share based on stronger travel retail and emerging market recovery, while another might lean toward a more cautious Narrative nearer $61, assuming slower demand and margin pressure, and the platform makes those differing perspectives transparent and easy to explore.
Do you think there’s more to the story for Estée Lauder Companies? Head over to our Community to see what others are saying!
NYSE:EL Community Fair Values as at Dec 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include EL.
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