Estee Lauder Stock Looks Set To Bounce Back From A 13% Drop Last Month

Estee Lauder Companies Inc. stock (NYSE: EL) is down 13% in the past month, strongly underperforming the S&P 500 which was down 7.3% over this period. If you look at the change over the last one week and ten days, too, the stock has returned -6.9% and -2.8%, performing much worse than the broader markets on both occasions. Estee Lauder’s most recent FY ’22 earnings report (EL’s FY ends in June), saw revenue rising from $16.2 billion in FY ’21 to $17.7 billion in FY ’22, driven primarily by a jump in sales from the fragrance segment. While operating margins rose, a $800 million drop in other income and a rise in the effective tax rate, saw net income drop from $2.87 billion in FY ’21 to $2.39 billion in FY ’22. Due to this, EPS dropped from $7.91 to $6.64 over this period.

Now, is Estee Lauder stock set to continue its underperformance or could we expect a bounce back? We believe that there is a strong 64% chance of a rise in EL stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on EL Stock Chance of Rise. For additional details about the company’s historical returns and comparison to peers, see Estee Lauder (EL) Stock Return. 

Twenty-One Day: EL -13%, vs. S&P500 -7.3%; Underperformed market

(2% likelihood event; 64% probability of rise over next 21 days)

• EL stock lost 13% over the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 7.3%
• A change of -13% or more over twenty-one trading days is a 2% likelihood event, which has occurred 45 times out of 2516 in the last 10 years
• Of these 45 instances, the stock has seen a positive movement over the next twenty-one trading days on 29 occasions
• This points to a 64% probability for the stock rising over the next twenty-one trading days

Ten Day: EL -2.8%, vs. S&P500 0.9%; Underperformed market

(17% likelihood event; 56% probability of rise over next 10 days)

• EL stock lost 2.8% over the last ten trading days (two weeks), compared to a broader market (S&P500) rise of 0.9%
• A change of -2.8% or more over ten trading days is a 17% likelihood event, which has occurred 436 times out of 2516 in the last 10 years
• Of these 436 instances, the stock has seen a positive movement over the next ten trading days on 245 occasions
• This points to a 56% probability for the stock rising over the next ten trading days

Five Day: EL -6.9%, vs. S&P500 -1.9%; Underperformed market

(3% likelihood event; 53% probability of rise over next five days)

• EL stock lost 6.9% over a five-day trading period ending 10/13/2022, compared to the broader market (S&P500) which was down 1.9% over this period.
• A change of -6.9% or more over five trading days (one week) is a 3% likelihood event, which has occurred 64 times out of 2516 in the last 10 years
• Of these 64 instances, the stock has seen a positive movement over the next five trading days on 34 occasions
• This points to a 53% probability for the stock rising over the next five trading days

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[1] Month-to-date and year-to-date as of 10/14/2022
[2] Cumulative total returns since the end of 2016

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