B.Riley Financial analyst Anna Glaessgen maintains $Estee Lauder (EL.US)$ with a hold rating, and adjusts the target price from $95 to $70.
According to TipRanks data, the analyst has a success rate of 36.7% and a total average return of -12.1% over the past year.
Furthermore, according to the comprehensive report, the opinions of $Estee Lauder (EL.US)$'s main analysts recently are as follows:
The forecasted performance of Estee Lauder for the first quarter exceeded expectations, but this was eclipsed by the guidance for the second quarter falling short of consensus, along with the retraction of second-half forecasts and a reduction in dividends. The analyst notes that there is currently limited transparency and is looking forward to potential strategic shifts and additional efficiency measures from the incoming executives, which should encompass a more comprehensive restructuring scheme to tackle the company's considerable cost framework.
Projecting the newly established 35 cents per share quarterly dividend and assuming Estee Lauder's commitment to a dividend payout ratio close to 40%, it suggests a net income of $1.2 billion, which translates to an earnings power of $3.50 per share over time. The analyst highlights that it appears to be premature to capitalize on the current price decline, considering the ongoing deceleration and uncertainties in China, coupled with the transition to a new CEO in January.
Estee Lauder has been experiencing a 'persistent' decline in sales, with limited future visibility, prompting management to withdraw financial guidance. The company is grappling with operational deleverage due to lower than anticipated volumes in China and Asia's travel retail sector. This situation suggests that the execution of its strategic plans and the realization of returns may be postponed. It is considered advisable for investors to look for clearer indications of demand recovery before proceeding.
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