DCF Studio

    EL · NYQ · Consumer Defensive

    The Estée Lauder Companies Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 25.86

    Market price

    USD 104.77

    Implied upside

    -75.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-06-30

    AdjustedCapital expenditure runs at 8.4% of revenue against depreciation of 5.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 25.86-75.3%
    Exit multiple
    USD 71.37-31.9%
    Market price
    USD 104.77

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 15.8bnUSD 16.4bnUSD 17.1bnUSD 17.7bnUSD 18.4bnUSD 19.0bnUSD 19.6bnUSD 20.1bnUSD 20.7bnUSD 21.2bn+3.3%
    EBITUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+3.3%
    NOPATUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bn+3.3%
    Add depreciation & amortisationUSD 830.4mUSD 865.1mUSD 899.4mUSD 933.1mUSD 966.2mUSD 998.5mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bn+3.3%
    Less capital expenditureUSD -1.3bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.5bnUSD -1.5bnUSD -1.5bnUSD -1.5bnUSD -1.5bnUSD -1.5bn+1.6%
    Capex, % of revenue8.4%8.3%8.2%8.1%7.9%7.8%7.7%7.5%7.4%7.3%-
    Less increase in working capitalUSD -112.8mUSD -100.4mUSD -99.4mUSD -97.9mUSD -95.9mUSD -93.4mUSD -90.5mUSD -87.1mUSD -83.2mUSD -78.9m-3.9%
    Free cashflow to firmUSD 638.8mUSD 703.8mUSD 758.9mUSD 815.6mUSD 873.9mUSD 933.3mUSD 993.7mUSD 1.1bnUSD 1.1bnUSD 1.2bn+7.0%
    Discount factor0.95900.88190.81100.74580.68590.63080.58010.53350.49060.4512-
    Present valueUSD 612.5mUSD 620.7mUSD 615.5mUSD 608.3mUSD 599.4mUSD 588.7mUSD 576.5mUSD 562.8mUSD 547.8mUSD 531.7m-
    Present Value Of The ForecastUSD 5.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.154Reported 1.230, pulled toward 1.0 (Blume)
    Cost of equity9.78%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 5.0x interest cover. Book interest / average debt was lower, at 3.6%.
    Market capitalisationUSD 38.0bn80.4% of capital
    Total debtUSD 9.2bn19.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.74%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 25.86

    61% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (25.4% of NOPAT)
    USD -429.1m
    Capitalised
    USD 1.3bn
    ROIC (reported)
    9.8%
    Terminal value, undiscounted
    USD 20.7bn
    Terminal value, discounted
    USD 9.3bn
    Enterprise value
    USD 15.2bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 9.4bn

    Exit at 17.7x EBITDA

    Value per shareUSD 71.37

    82% of EV

    Terminal value, undiscounted
    USD 57.4bn
    Terminal value, discounted
    USD 25.9bn
    Enterprise value
    USD 31.8bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 26.0bn

    Spread between methods: 94%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.74%44.1045.2146.7148.7751.64
    7.74%33.7733.9534.2734.7835.53
    8.74%26.3426.0825.8625.7025.60
    9.74%20.7520.2819.8119.3418.87
    10.74%16.7916.3715.9515.5315.11

    Outlined: this model. Green text: above today's price of 104.77. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-1.8%3.5%17.6%
    EBIT margin11.1%10.1%26.2%
    Discount rate-8.7%4.7%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.