Robert Way
Intro – the dip that keeps on dipping
Last August, I published my first article about Estée Lauder (NYSE:EL), a beauty company that I consider to be in decline due to structural issues. Back then, I was
Estée Lauder: The Stock Haș Bounced, But Is Far From Pretty
Summary
- Estée Lauder faces ongoing structural and operational challenges, with no signs of a turnaround as organic sales and travel retail continue to decline sharply.
- Cost-cutting and restructuring efforts have improved gross margins, but operating margins and cash flow remain under pressure, highlighting limited financial flexibility.
- The balance sheet is burdened by $4.6 billion in net debt, and persistent industry headwinds further threaten profitability and recovery prospects.
- Despite an 80% stock decline, valuation remains excessive relative to fundamentals; I see further downside risk and maintain my Sell rating.
Always on the hunt for undervalued, promising stocks with a focus on risk and reward. Limited risks and decent to high upside by knowing what one's owning. I strongly believe that the best investment ideas are often the simplest. If contrarian, the better.
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