GURUFOCUS.COM » STOCK LIST » Latin America » Mexico » MEX » The Estee Lauder Companies Inc (MEX:EL) » Definitions » Intrinsic Value: DCF (Dividends Based)
Switch to:

The Estee Lauder (MEX:EL) Intrinsic Value: DCF (Dividends Based)

: MXN1,138.18 (As of Today)
View and export this data going back to 2014. Start your Free Trial

As of today (2023-05-27), The Estee Lauder's intrinsic value calculated from the Discounted Dividend model is MXN1,138.18.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history with more than 5 years. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's Predictability Rank is 1-Star or Not Rated, the data will not be stored into our database.

The Estee Lauder's Predictability Rank is 3.5-Stars.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for The Estee Lauder is -200.68%.

The historical rank and industry rank for The Estee Lauder's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

MEX:EL' s Price-to-DCF (Dividends Based) Range Over the Past 10 Years
Min: 2.06   Med: 4.51   Max: 7.72
Current: 3.01

During the past 13 years, the highest Price-to-Intrinsic-Value-DCF (Dividends Based) Ratio of The Estee Lauder was 7.72. The lowest was 2.06. And the median was 4.51.

MEX:EL's Price-to-DCF (Dividends Based) is ranked worse than
68.72% of 227 companies
in the Consumer Packaged Goods industry
Industry Median: 2.24 vs MEX:EL: 3.01

The Estee Lauder Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for The Estee Lauder's Intrinsic Value: DCF (Dividends Based) 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
Intrinsic Value: DCF (Dividends Based)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 675.54 872.57 1,142.59 1,110.75 1,052.80

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
Intrinsic Value: DCF (Dividends Based) 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 985.93 1,052.80 885.91 873.59 825.62

Competitive Comparison

For the Household & Personal Products subindustry, The Estee Lauder's Intrinsic Value: DCF (Dividends Based), along with its competitors' market caps and Intrinsic Value: DCF (Dividends Based) 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 Intrinsic Value: DCF (Dividends Based) Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, The Estee Lauder's Intrinsic Value: DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where The Estee Lauder's Intrinsic Value: DCF (Dividends Based) falls in comparison to its industry or sector. The grey bar indicates the Intrinsic Value: DCF (Dividends Based)'s extreme value range as defined by GuruFocus.



The Estee Lauder Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. H-Model formula is applied here, in which dividends are used in the calculation with two stage of dividend growth. The calculation for H-Model DDM valuation shows as below.

The H-model formula consists of two parts. The first component of the equation adds the value from the high growth rate period, which is called growth stage. The second component of the formula considers the value of the stock based on the long-term growth rate, which is called the terminal stage. It ignores the high growth rate period. In the growth stage, the dividends of company grows at a faster rate. As it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 10%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. We used the 10-Year Treasury Constant Maturity Rate as the risk free rate and rounded up to the nearest integer, then added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 11.00%
Growth Rate in the growth stage = average dividend growth rate in the past 5 years. If it is higher than 20%, we use 20%. If it is less than 5%, we use 5% instead. => Average Dividend Growth Rate in the past 5 years was 11.00% which is less than 20% and higher than 5% => Growth Rate: 11.00%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: dividends per share = MXN49.130.
GuruFocus DCF calculator applies H-Model to the calculation here, using dividends per share TTM as the default.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

The Estee Lauder's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based) = Dividends per Share *( g1 - g2 ) / ( d - g2 ) * y1 / 2
+ Dividends per Share * ( 1 + g2 ) / ( d - g2 )
= 49.130 * (0.11 - 0.04) / (0.1 - 0.04) * 10 / 2
+ 49.130 * ( 1 + 0.04) / (0.1 - 0.04)
= 1,138.18

Margin of Safety % (DCF Dividends Based) = (Intrinsic Value: DCF (Dividends Based)-Current Price) /Intrinsic Value: DCF (Dividends Based)
= (1138.18 - 3422.27) / 1138.18
= -200.68 %

* 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) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.


Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 5 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.


The Estee Lauder Intrinsic Value: DCF (Dividends Based) Related Terms

Thank you for viewing the detailed overview of The Estee Lauder's Intrinsic Value: DCF (Dividends Based) 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

Other Sources