2020 will be remembered for being the year of Covid-19, which has not only directly affected people's health by collapsing healthcare systems, but by impacting our habits and lifestyles. We stopped going to the gym, working in offices, attending sporting events, attending the theatre, seeing movies, visiting museums, and travelling.
These changes also affect our physical appearance, since by reducing our social activity to a minimum, spending much more time at home with closed circles of people, we have stopped buying clothes and getting ready to go out, which impacts the results from companies like Estee Lauder, as the obligation to wear masks, the lack of nightlife and teleworking has reduced the use of makeup.
During yesterday’s trading day, the company announced its quarterly results. Despite the fact that we could observe an increase in the earnings per share, its income did not reach the expectations of the market consensus. Specifically, earnings per share were $1.59. with an income of $3.87 billion, versus $1.32 and $ 3.94 billion expected.
As in other sectors, the vaccination process and the control of the pandemic will be key for the coming months, since as this process advances, both tourism and leisure will gain more and more strength, generating greater demand for both the makeup and different skin protection creams for the summer.
Yesterday, after these results were announced, Estee Lauder lost 7.90% in the stock market causing the price to lose $300 per share, closing at $288.89, in the vicinity of the 38.2% Fibonacci retracement level that currently acts as its first support. The loss of this level could cause a further retracement in search of its next level of support at the previous lows in the red band or even up to the 50% Fibonacci level.
Over the last year, this company has followed a strong upward trend, as we can see in the daily chart, driven by the strong rises in the US stock markets. Specifically, after setting minimums on March 18, 2020, at $136.11, the price began a spectacular bullish rally that led it to reach maximums on April 29 at $318.27 per share, which represents an increase of 133, or 83%, despite the accumulated overbought and the bearish divergence that we can observe in recent months in its stochastic and MACD indicators respectively.
Source: Admiral Markets MetaTrader 5. Estee Lauder daily chart. Data range: from December 28, 2018, to May 4, 2021. Prepared on May 4, 2021, at 11:55 am CEST. Keep in mind that past returns do not guarantee future returns.
Price evolution of the last 5 years:
- 2020: 28.88%
- 2019: 58.75%
- 2018: 2.25%
- 2017: 66.35%
- 2016: -13.14%
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