Summary
EL shares fell 4.4% on the day when Q2 FY23 results were released and have now fallen by more than 11% in a month.
Including currency, Net Sales fell 17% and EPS fell 49% year-on-year in the quarter, and further declines are expected next quarter.
EL has been impacted by a variety of problems in China, the U.S. and Korea, some of which appear to be of its own making.
EL expects growth to resume in Q4 and hints at a strong FY24. Market growth and EL's strong brands should carry it through.
With shares at $244.64, EL is at 40x CY19 earnings and we expect a total return of 37% (10.2% annualized) by June 2026. Buy.
Introduction
The Estée Lauder Companies Inc. (NYSE:EL) released Q2 FY23 results (for October-December 2022) on February 2. EL stock fell 4.4% that day and has continued falling, and is now down by more than 11% from before the results
EL continues to suffer from headwinds. Including currency, Net Sales fell 17% and EPS fell 49% year-on-year. EL has been impacted by problems in …