Estee Lauder’s (NYSE:EL) makeup revenue declined from around $5.9 billion in 2019 to about $4.2 billion in 2020. Trefis expects the metric to decline further to about $4.2 billion in 2021 although it should recover to around $4.85 billion in 2022.
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Makeup sales over 2020 were impacted by the Covid-19 pandemic and the stay-at-home trend, and we expect them to remain under pressure in 2021 as well. However, sales should see a recovery over 2022.
EL stock has been a strong performer, rising by about 52% over the last 12 months, driven by a solid performance of its skincare segment through the pandemic. However, we think the stock still has a little more room to run as its makeup, fragrance, and haircare divisions stage a recovery. We value EL at $361 per share, a premium of 10% over the market price.