Should You Invest in Estee Lauder?

PHOTO CREDIT: Estee Lauder

OVERVIEW

The Estee Lauder Companies Incorporation is a company based in the United States. The company designs, manufactures, and sells personal care products around the world. The company makes makeup, skincare products, lotion, moisturizers, and other products as well. The company operates under several brands which can be viewed on the company’s website. The company was founded in 1946.

Why You Should?

1. Estee Lauder is a great reopening play in an investor’s portfolio. The company saw a drop in demand for their products as people stayed at home and used personal care products like makeup less. However, the company will see strong growth as people purchase personal care products as they go out again.
2. Estee Lauder is a safe investment option in an investor’s portfolio. Though the company will see a drop in sales during a recession, the scale of the company and the products that it offers to its customers will provide some safety to investors during a recessionary time. This safety will benefit the company and its investors.
3. The company has extremely good brand recognition in the personal care and makeup market. The company operates Estee Lauder, Aramis, MAAC, and many others. Because of this strong brand recognition, the company is known for its high-quality products, something that will help the company gain new customers and retain others for a longer time.
4. Estee Lauder can capitalize on e-commerce opportunities to further grow its presence in the makeup and personal care market. Younger consumers, who want to purchase Estee Lauder products, want to shop online. If the company continues to develop its e-commerce platform, younger consumers can purchase more of the company’s products. This will benefit the company.

Why You Should Not?

1. The company faces tough competition in the personal care and makeup industry. Some of these competitors include Chanel, Procter and Gamble, Unilever, and many others. This competition might hurt the company and its investors in the future.
2. The company has been negatively impacted by the pandemic. People saw a drop in incomes, something that caused them to not purchase expensive personal care products. In addition to this, people stayed indoors, something that reduced the frequency of use for Estee Lauder products (ex: people were not wearing makeup on Zoom 100% of the time). This hurt the company.

MY OPINION

I think that Estee Lauder is a decent long-term investment due to its position as a good reopening play, a position as a safe investment option, good brand recognition, as well as many e-commerce opportunities. However, tough competition and negative impacts from the pandemic might hurt the company and its investors in the future.