• Estée Lauder's lofty valuation is already pricing in a sustainable tailwind for its skin care business.
• Due to lack of competition, high-quality names in the cosmetics space have become too expensive, even after accounting for profitability.
• Intensifying competition brings in additional risk for profitability and top-line growth going forward.

Source: elcompanies.com

Contrary to the drop in demand of makeup and other beauty products due to the pandemic, 2020 was one of the best years for the high-quality names in the Cosmetics industry, such as Estée Lauder (NYSE:EL) and L'Oréal (OTCPK:LRLCY).

Data by YCharts

In the case of Estée Lauder, this outstanding performance in the face of struggling beauty segments like makeup and fragrances came as a result of two major factors. On one hand, the company's strong positioning in skin care, which benefited during the pandemic, and on the other hand, less competition in the space.

READ FULL ARTICLE HERE