Estee Lauder: Premium Brands and Omnichannel Investments to Fuel Growth; Shares Attractive

We are raising our fair value estimate for Estee Lauder to $256 (from $253), which implies 39 times multiple against our fiscal 2025 (June-ending) earnings estimate. The increase is driven by time value, as our increased annual sales growth estimates over the 10-year period (6.1% versus 5.3% prior) are offset by tapered average operating margin assumptions (20% versus 21%) due to a stepped-up manufacturing and selling cost outlook, leaving our net income forecast virtually unchanged. We view Estee shares as attractive, trading at a 25% discount to our intrinsic valuation, and suggest investors looking to ride beauty tailwinds start building a position in this name.