Estee Lauder Inc. Receives Top Rating from Guru Strategy

Estee Lauder Companies Inc. ranks highly in a guru fundamental report, showcasing a 55% score under the P/B Growth Investor model. While some operational metrics show weaknesses, the overall rating reflects underlying growth potential in a challenging market.

Date: 11-09-2024

AI Rating: 6

According to the report, Estee Lauder Companies Inc. (EL) has received a rating of 55% under the P/B Growth Investor model.

This model is designed to identify low book-to-market stocks with characteristics that suggest sustained future growth. Despite its overall score, Estee Lauder does exhibit some weaknesses in key operational metrics.

Key Weaknesses:

Return on Assets: The company failed this metric, indicating potential inefficiencies in generating profits from its assets.
Cash Flow from Operations to Assets: This ratio also failed, suggesting that the company's operating cash flows are not being effectively utilized relative to its total assets.
Return on Assets Variance: This aspect failed, indicating inconsistency in the efficiency of asset utilization over time.
Research and Development to Assets: This metric failed, which could hinder future growth prospects if the company is not investing adequately in R&D.

Areas of Strength:

Book/Market Ratio: The stock passed this criterion, indicating potential value.
Sales Variance: This passed, showing positive trends in revenue.
Advertising to Assets: This metric passed, suggesting effective marketing spending.
Capital Expenditures to Assets: This also passed, demonstrating a strong investment in physical and intangible assets.
Cash Flow from Operations to Assets vs. Return on Assets: This aspect passed, meaning the company has effective operating cash flow compared to its asset base.

The overall 55% score suggests moderate confidence in Estee Lauder’s growth potential despite the noted weaknesses. Investors might perceive this mixed performance as a nuanced picture—indicating areas for improvement while also revealing strengths that could provide stability or future growth.

Stocks: EL