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The Estee Lauder Companies Inc (NYSE:EL)
Intrinsic Value: Projected FCF
$36.52 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, The Estee Lauder Companies Inc's projected FCF intrinsic value is $36.52. The stock price of The Estee Lauder Companies Inc is $88.56. Therefore, The Estee Lauder Companies Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 2.4.

EL' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 1.21   Max: 5.97
Current: 2.42

1.21
5.97

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of The Estee Lauder Companies Inc was 5.97. The lowest was 1.21. And the median was 2.49.

EL's Price to Intrinsic Value: Projected FCF is ranked lower than
70% of the 649 Companies
in the Global Household & Personal Products industry.

( Industry Median: 1.48 vs. EL: 2.42 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here The Estee Lauder Companies Inc's FCF(6 year avg) is calculate as

The Estee Lauder Companies Inc Quarterly Data

201403201406201409201412201503201506201509201512201603201606
total_freecashflow 26119849757299365-82821243282
201109201112201203201206201209201212201303201306201309201312
total_freecashflow -117546169108-221670179137-56621
201009201012201103201106
total_freecashflow -97460141172

Add all the Free Cash Flow together and divide 6 will get The Estee Lauder Companies Inc's FCF(6 year avg) = $984.33.

The Estee Lauder Companies Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jun16)*0.8)/Shares Outstanding
=(11.0694520864*984.333333333+3571.9*0.8)/376.600
=36.52

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

The Estee Lauder Companies Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=88.56/36.5203151099
=2.42

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

The Estee Lauder Companies Inc Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Projected FCF 15.5116.8113.5614.3918.3820.8425.9834.7837.8136.52

The Estee Lauder Companies Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Projected FCF 33.6434.7837.1240.1342.0737.8137.7243.0941.6536.52
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