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The Estee Lauder (MEX:EL) Graham Number

: MXN156.11 (As of Mar. 2023)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2023-06-02), the stock price of The Estee Lauder is MXN3274.18. The Estee Lauder's graham number for the quarter that ended in Mar. 2023 was MXN156.11. Therefore, The Estee Lauder's Price to Graham Number ratio for today is 20.97.

The historical rank and industry rank for The Estee Lauder's Graham Number or its related term are showing as below:

MEX:EL' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 2   Med: 4.21   Max: 39.89
Current: 22.01

During the past 13 years, the highest Price to Graham Number ratio of The Estee Lauder was 39.89. The lowest was 2.00. And the median was 4.21.

MEX:EL's Price-to-Graham-Number is ranked worse than
99.67% of 1199 companies
in the Consumer Packaged Goods industry
Industry Median: 1.27 vs MEX:EL: 22.01

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


The Estee Lauder Graham Number Historical Data

The historical data trend for The Estee Lauder's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

The Estee Lauder Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 322.06 381.74 110.10 - -

The Estee Lauder Quarterly Data
Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - 182.51 156.11

Competitive Comparison

For the Household & Personal Products subindustry, The Estee Lauder's Graham Number, along with its competitors' market caps and Graham Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

The Estee Lauder Graham Number Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, The Estee Lauder's Graham Number distribution charts can be found below:

* The bar in red indicates where The Estee Lauder's Graham Number falls in comparison to its industry or sector. The grey bar indicates the Graham Number's extreme value range as defined by GuruFocus.



The Estee Lauder Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

The Estee Lauder's Graham Number for the fiscal year that ended in Jun. 2022 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*-20.228*131.773)
=N/A

The Estee Lauder's Graham Number for the quarter that ended in Mar. 2023 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*18.367*58.974)
=156.11

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


The Estee Lauder  (MEX:EL) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

The Estee Lauder's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Mar. 2023 )
=3274.18/156.11
=20.97

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


The Estee Lauder Graham Number Related Terms

Thank you for viewing the detailed overview of The Estee Lauder's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


The Estee Lauder (MEX:EL) Business Description

The Estee Lauder logo
Traded in Other Exchanges
Address
767 Fifth Avenue, New York, NY, USA, 10153
Estee Lauder is the world leader in the global prestige beauty market, participating across skincare (56% of fiscal 2022 sales), makeup (26%), fragrance (14%), and haircare (4%) categories, with popular brands such as Estee Lauder, Clinique, MAC, La Mer, Jo Malone, Aveda, Bobbi Brown, Too Faced, Origins, Dr. Jart+, and The Ordinary. The firm operates in 150 countries, with 26% of fiscal 2022 revenue stemming from the Americas, 43% from Europe, the Middle East and Africa, and 31% from Asia-Pacific. The company sells its products through department stores, travel retail, multibrand specialty beauty stores, brand-dedicated freestanding stores, e-commerce, salons/spas, and perfumeries.

The Estee Lauder (MEX:EL) Headlines

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