BofA Securities maintains Buy rating on Estee Lauder stock ahead of earnings

Published 18/08/2025, 14:06
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Investing.com - BofA Securities has reiterated its Buy rating and $110.00 price target on Estee Lauder (NYSE:EL) ahead of the company’s fourth-quarter fiscal 2025 earnings report scheduled for August 20. The stock, currently trading at $90.97, has shown strong momentum with a 27.27% return over the past six months. According to InvestingPro data, analyst targets range from $56.20 to $120.00, with 7 analysts recently revising their earnings estimates upward.

The research firm expects the underlying details of the report to be more significant than headline results, as they could serve as proof points that the business is rebuilding revenues at high incremental margins while investing in its brands for a sustainable turnaround. InvestingPro analysis reveals impressive gross profit margins of 73.93%, though revenue declined 3.65% in the last twelve months.

BofA Securities is looking for several key improvements in the upcoming results, including better organic revenues excluding travel retail (compared to -3% in Q3), recovery in U.S. and China markets, gross margin beats from manufacturing efficiencies, and operating costs that may miss consensus due to reinvestment in consumer-facing activities. The company maintains strong financial health with a current ratio of 1.41, indicating sufficient liquidity to meet short-term obligations. Get deeper insights into Estee Lauder’s financial metrics and more exclusive analysis with InvestingPro.

For the outlook, the firm wants to hear that organic revenues excluding travel retail can turn positive in fiscal year 2026, with first-half 2026 travel retail revenues still expected to be negative due to Korean market weakness, and plans for product innovation aimed at customer recruitment.

BofA Securities also expects Estee Lauder to outline shelf space expansion plans and notes that any higher-than-expected cost efficiencies should be entirely reinvested, while foreign exchange tailwinds could largely offset tariff headwinds.

In other recent news, Estee Lauder Companies Inc. has been the focus of several analyst updates and internal company changes. Canaccord Genuity increased its price target for Estee Lauder to $85, maintaining a Hold rating, citing expectations for profit recovery by fiscal year 2027 despite current earnings challenges. UBS also reiterated a Neutral rating with a $93 price target ahead of the company’s upcoming fourth-quarter fiscal 2025 earnings report. Meanwhile, Citi raised its price target to $95, projecting a challenging quarter with a 12.5% decline in organic sales growth.

In terms of company leadership, Estee Lauder appointed Aude Gandon as Chief Digital & Marketing Officer, effective August 1, 2025. Gandon will spearhead the transformation of the company’s digital and marketing strategies. Additionally, the company announced board changes, with Lynn Forester de Rothschild deciding not to stand for re-election at the 2025 Annual Meeting of Stockholders. Estee Lauder clarified that her decision was not due to any disagreements with the company’s operations or policies.

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