On Nov 02, major Wall Street analysts update their ratings for $Estee Lauder (EL.US)$, with price targets ranging from $70 to $107.
Morgan Stanley analyst Dara Mohsenian maintains with a hold rating, and adjusts the target price from $100 to $85.
Goldman Sachs analyst Bonnie Herzog maintains with a hold rating, and adjusts the target price from $115 to $75.
J.P. Morgan analyst Andrea Faria Teixeira downgrades to a hold rating, and adjusts the target price from $113 to $74.
BofA Securities analyst Bryan Spillane maintains with a hold rating, and adjusts the target price from $100 to $75.
UBS analyst Peter Grom maintains with a hold rating, and adjusts the target price from $104 to $74.
Furthermore, according to the comprehensive report, the opinions of $Estee Lauder (EL.US)$'s main analysts recently are as follows:
Estee Lauder's first quarter performance exceeded expectations, but this was overshadowed by second quarter guidance that didn't meet consensus, alongside the withdrawal of guidance for the second half and a reduction in dividends. An analyst notes that visibility is currently quite limited, and there is anticipation of potential changes in strategy and additional plans to improve productivity with the arrival of new leadership. It is believed that an expanded restructuring plan should be implemented to address the company's significant cost structure.
The expectation for Estee Lauder's dividend commitment to remain near a 40% payout ratio suggests a net income projection of $1.2 billion, or an earnings potential of $3.50 per share over time. The analyst believes it may be too soon to capitalize on the stock's recent decline, given the ongoing deceleration in China and the upcoming transition to a new CEO in January.
Estee Lauder has been experiencing ongoing sales declines and a lack of foreseeable clarity, prompting management to retract their financial guidance. The absence of clear direction is anticipated to persist for the upcoming quarter. Challenges stemming from diminished volumes in China and Asia's travel retail sector have led to operational leverage issues, suggesting a postponement in the execution of the company's strategy and potential returns. It is advisable for investors to look for more positive indicators of demand recovery before proceeding.
Despite previously set low expectations, Estee Lauder's fiscal first-quarter results and updated guidance fell short of forecasts, marked by the withdrawal of fiscal 2025 guidance, a second-quarter outlook that failed to meet expectations, and a reduced dividend. The stock is anticipated to experience a notable decline and may approach historical low points. The deteriorating trends in China and the absence of clear strategic direction from the soon-to-be CEO, Stephane de la Faverie, contribute to the uncertainty surrounding Estee Lauder's sales and earnings prospects.
Estee Lauder's recent earnings announcement was unexpectedly weak. Although Q1 results were roughly in line with expectations, management's Q2 forecast, withdrawal of guidance, and reduced dividend were seen as letdowns. Despite these challenges, it's believed that the stock's current valuation has significantly deviated from what's considered its fair value.
Here are the latest investment ratings and price targets for $Estee Lauder (EL.US)$ from 12 analysts:
Note:
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