The Estee Lauder Companies Inc. (EL): A Bull Case Theory

We came across a bullish thesis on The Estée Lauder Companies Inc. on Brass Tacks Cap’s Substack. In this article, we will summarize the bulls’ thesis on EL. The Estée Lauder Companies Inc.'s share was trading at $91.73 as of August 29^th. EL’s trailing and forward P/E were 80.96 and 45.25 respectively according to Yahoo Finance.

Estée Lauder Companies Inc. (EL) stands as a global leader in prestige beauty, anchored by a portfolio of over 25 iconic brands spanning skincare, makeup, fragrance, and hair care. Its success is built on brand equity, premium positioning, and strong consumer loyalty, with flagship names like Estée Lauder, Clinique, La Mer, and MAC commanding premium pricing and delivering high gross margins of 75–80%. The company benefits from a diversified multi-channel distribution model, with strength across department stores, specialty retail, e-commerce, travel retail, and freestanding stores, which provides resilience and flexibility in shifting consumer environments. Estee Lauder’s integrated supply chain, R&D centers, and innovation capabilities allow it to stay ahead of trends, launch new hero products, and drive repeat purchases in consumable categories like skincare, which alone contributes over half of sales.

Competitive advantages include scale, enabling superior investments in marketing and R&D, and entrenched retailer relationships that secure favorable positioning. Growth drivers are strong, with expansion opportunities in emerging markets like China and India, accelerating digital sales, a recovery in travel retail, and secular tailwinds in skincare and wellness. Strategic acquisitions such as TOM FORD, Dr. Jart+, and DECIEM have further expanded its portfolio into luxury and dermocosmetics. Financially, the company balances reinvestment with disciplined capital allocation through dividends, opportunistic buybacks, and selective acquisitions.

Backed by the Lauder family’s 40% ownership and CEO Fabrizio Freda’s proven leadership, the company operates with a long-term, owner-operator mindset. With durable competitive advantages, resilient demand, and multiple secular growth levers, Estée Lauder represents a high-quality compounder capable of delivering attractive long-term returns for patient investors.

Previously we covered a bullish thesis on The Estée Lauder Companies Inc. (EL) by D Invests in February 2025, which highlighted restructuring efforts, margin expansion, and turnaround potential despite sales declines and operational challenges. The company’s stock price has appreciated approximately 34% since our coverage. The thesis still stands as EL’s brand equity and pricing power remain intact. Brass Tacks Cap shares a similar view but emphasizes long-term compounding potential.

The Estée Lauder Companies Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held EL at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the potential of EL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.