What's happening inside $Estee Lauder(EL)$ ?
I don't invest in consumer stocks, but this is an interesting one.
- All measures of profitability are down over the last 5 years.
- Return on capital has plummeted since 2019.
- Margins have weakened as COGS and SG&A have gone up.
- Leverage and cost of debt also up.
Companies selling to other companies enter into long-term contracts, which can mean highly predictable and recurring revenue,
While a fair number are seemingly more expensive than the S&P 500, the potential of these companies to continue growing their FCF at above market rates remains.
Image
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments