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Estée Lauder (EL) used to be the queen of luxury beauty. Think iconic skincare, prestige makeup, and the kind of high-end branding that screams elegance.

But lately? Things haven’t been so pretty.

Sales are down. China’s spending slowdown hit hard. And a $2.6 billion bet on the Tom Ford brand? It backfired—big time. The stock has crashed over 83% from its all-time high, and now, investors are wondering:

Is Estée Lauder still a beauty icon—or a fading brand stuck in a midlife crisis?

They’ve brought in a new CEO, made bold tech partnerships with Microsoft, Adobe, and MIT, and doubled down on emerging markets like India and Brazil. The dividend is still here (just trimmed), and the May 1 earnings report might be a make-or-break moment.

So, should you bet on a comeback—or leave this one in your makeup bag?

To figure it out, we’re using the Invest Diva Diamond Analysis (IDDA). This framework helps break down a stock to see if it actually fits your financial goals.

Here’s how we do it:

Capital Analysis – Know your risk tolerance.

Intentional Analysis – Know your money goals and timelines.

Fundamental Analysis – Dive into the company’s performance and potential.

Sentimental Analysis – See what the market and media are really saying.

Technical Analysis – Use charts to spot key levels and trends.

Let’s break down Estée Lauder and see if it’s a value opportunity in disguise—or a luxury trap in decline.

IDDA Point 1 & 2: Capital & Intentional

Before investing in Estée Lauder (EL), ask yourself:

 Does this stock align with your risk tolerance?

 Are you investing for growth, dividends, or a bit of both?

 Can you handle short to medium term volatility for potential long-term gains?

Estée Lauder is currently considered a high-risk stock. The brand is iconic, but it’s facing real challenges—weak sales in China, a botched acquisition, rising debt, and a stock price that’s dropped over 83% from its peak.

However, if you’re a long-term investor who believes in the power of global beauty, brand loyalty, and innovation, Estée Lauder could be a turnaround play worth watching, especially with leadership changes and upcoming earnings on the horizon.

If you’re more focused on consistent income or can’t stomach uncertainty, you may want to consider sitting this one out, or keep it on your watchlist until signs of recovery are clearer.

IDDA Point 3: Fundamental Analysis

Estée Lauder has been facing significant headwinds:

Financial Performance (Q1 Fiscal 2025)

• Net Sales: Decreased by 4%.
• Net Loss: $156 million, primarily due to a $159 million charge related to talcum litigation settlements .
• Adjusted Earnings Per Share (EPS): Increased to $0.14.
• Dividend: Reduced to align with a more appropriate payout ratio.
• Outlook: The company withdrew its fiscal 2025 outlook amid uncertainties in the Chinese market, Asia travel retail and Trump’s new tariffs on European goods

Over the past few years, Estée Lauder’s stock price has fallen drastically, down nearly 83%, mainly due to a drop in sales, profits, and cash flow. 

A major part of the decline is linked to weak performance in Asian markets like China and South Korea, where consumer spending has slowed down because of economic concerns and low confidence. The beauty industry in these regions has become highly competitive, and even big names like Sephora are struggling. 

On top of that, global issues like trade tensions and changing travel habits have also hurt the company’s performance, especially in its travel retail segment such as airport stores and duty-free shops.

One of the company’s biggest missteps was acquiring the luxury brand TOM FORD in 2022 for $2.6 billion, expecting strong growth from it. However, the brand underperformed and led to a huge $773 million loss (a write-down), showing they likely overpaid. 

At the same time, Estée Lauder kept paying dividends to shareholders and didn’t reduce its spending fast enough, which caused its debt to grow sharply, from $1.46 billion to $4.69 billion. 

Innovation & Partnerships

Estée Lauder is actively investing in technology and innovation:

• Microsoft Partnership: Collaborating to create an AI Innovation Lab aimed at enhancing consumer connections and speeding up product development .
• Adobe Collaboration: Utilizing Adobe Firefly and other tools to modernize digital asset management and streamline content production .
• MIT Partnership: Working with MIT’s Langer Lab to develop biodegradable polymers for use in personal care products . 

Recent News & Events

• Leadership Change: Stéphane de La Faverie appointed as CEO, succeeding Fabrizio Freda, marking a strategic shift in leadership. This leadership change coincides with the Lauder family’s step back from daily operations, though they remain significant shareholders and board members . 
• Neiman Marcus Collaboration: Hosting customer events to honor Leonard A. Lauder’s contributions.

IDDA Point 4: Sentimental Analysis 

Bullish Views

• Global premium beauty demand is rising.
• Strong omni-channel presence.
• Innovation centers in China and Japan may drive region-specific product launches. 

Bearish Views

• Overdependence on China and US department stores.
• Slower innovation pace than competitors like L’Oréal.
• Impact of new US tariffs on European goods, which could raise input costs.
• A costly acquisition that failed to perform.
• Rising debt and dividend payout pressure.

The current market sentiment is cautious. The stock is in a “wait and see” zone ahead of its earnings release on May 1st, which could be a turning point. A strong report may reverse bearish sentiment.

IDDA Point 5: Technical Analysis

Chart View (Weekly): 

Estée Lauder has been in a sustained downtrend since peaking at $353 in December 2021. It’s now trading around $54.57, far below its 2021 highs.

The future Ichimoku Cloud remains bearish

The candlesticks trading below the cloud, which indicated a continued downward momentum.

With earnings scheduled for May 1st, some volatility can be expected in the lead-up. The current market price has retraced beyond the 38% Fibonacci level from a previous trend, suggesting a key area of interest for investors.

(Click on image to enlarge)

Investors looking into get in can consider these Buy Limit levels:

Current market price 54.57

48.35

39.15

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices?

2. If I don’t buy at this price and the market suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals.

Final Thoughts: Should You Consider Estée Lauder (EL)?

Estée Lauder remains a premium brand powerhouse, but investors must weigh the risks. The company’s strategic missteps, exposure to fragile international markets, and recent underperformance have pulled its valuation down substantially.

However, new leadership, strong innovation efforts, and expansion plans in emerging markets could spark a comeback, if upcoming earnings show real improvement.

This could be a high-risk, high-reward setup. Consider waiting for confirmation from the next earnings report. If you’re a long-term investor with high risk tolerance, you might consider choosing to accumulate small positions during dips and hold for dividends and potential recovery.

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