The Estée Lauder Companies Inc. (EL) DCF Valuation
Why we don't show a single “fair value” for EL
Even the optimistic scenario of a conservative trailing-FCF model ($36.70) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$84.81 is justified only if free cash flow grows about +26.3% a year (fading to 2.5% long-run) at a 10.3% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 11.3% | $19.31 |
| Base case | 2.0%/yr | 10.3% | $25.50 |
| Optimistic | 5.0%/yr | 9.3% | $36.70 |
| Analyst DCF (FMP) | independent reference — different model | $32.29 | |
Current Price
$84.81
Market-Implied Growth
+26.3%/yr
vs +0.2% 5Y actual
Base-Case Model Value
$25.50
model output — not a price target
EL DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for EL (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.1B · 0.36B shares · net debt $4.4B
Estimated Fair Value
$24.92
-70.6% vs $84.81
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $84.81; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.3% | $33.15 | $35.17 | $37.55 | $40.37 | $43.78 |
| 9.3% | $27.30 | $28.70 | $30.31 | $32.17 | $34.36 |
| 10.3% | $22.78 | $23.79 | $24.92 | $26.22 | $27.70 |
| 11.3% | $19.19 | $19.93 | $20.76 | $21.69 | $22.74 |
| 12.3% | $16.26 | $16.82 | $17.44 | $18.13 | $18.90 |
About The Estée Lauder Companies Inc.
The Estée Lauder Companies Inc. is a global entity dedicated to the development, marketing, and sale of a diverse range of premium beauty and personal care items worldwide. Its extensive product catalog encompasses numerous offerings across four primary categories. For skin care, it provides moisturizers, serums, cleansers, toners, body treatments, exfoliants, acne and oil control solutions, facial masks, specialized cleansing devices, and sun protection. In makeup, consumers can find lipsticks, glosses, mascaras, foundations, eyeshadows, nail polishes, powders, compacts, brushes, and various other cosmetic tools. The fragrance segment includes eau de parfum sprays, colognes, scented lotions, powders, creams, candles, and soaps. Lastly, its hair care selection features shampoos, conditioners, styling aids, treatments, finishing sprays, and hair color products. Beyond these, the company also offers ancillary products and services. Estée Lauder boasts an impressive portfolio of owned brands, such as Clinique, M·A·C, Aveda, La Mer, Jo Malone London, and The Ordinary, among many others. Furthermore, it operates under license agreements for notable fashion labels including Tommy Hilfiger and Michael Kors. These products are distributed globally through a broad network of retail channels, comprising high-end department stores, specialty multi-brand retailers, luxury perfumeries and pharmacies, salons and spas, exclusive freestanding stores, its own and authorized online platforms, major third-party e-commerce sites, airport retail locations, and in-flight and duty-free concessions. Established in 1946, the company maintains its corporate headquarters in New York, New York.
- Sector
- Consumer Defensive
- Industry
- Household & Personal Products
- CEO
- Stephane de la Faverie