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Investing.com - Evercore ISI raised its price target on Estee Lauder (NYSE:EL) to $100.00 from $90.00 on Thursday, while maintaining an Outperform rating on the cosmetics giant. According to InvestingPro data, analyst targets for the stock range from $51.90 to $120.00, with the company currently trading at a Price/Book multiple of 6.5x.
The firm noted that investor interest in Estee Lauder has been slowly increasing and saw a notable uptick last week following the passing of Chairman Emeritus Leonard Lauder, though most investors remain in a "wait and see mode" with relatively low call volume.
Evercore ISI outlined eight reasons to reconsider Estee Lauder, including data suggesting improved market share performance in China and the United States, along with the observation that the global beauty market remains among the most attractive consumer sectors.
The research firm expressed growing confidence that the consensus earnings per share estimate of $2.54 for calendar year 2026 "may prove much too low," citing Estee Lauder’s potential to grow sales at least at industry rates by 2026.
Additional factors supporting the positive outlook include the company’s rebuilding share momentum, gains driven by launches on Amazon, high gross margins, enhanced management capabilities, and Estee Lauder’s current valuation, according to Evercore ISI.
In other recent news, Estée Lauder’s third-quarter fiscal year 2025 results revealed a 9% year-over-year drop in group organic sales, aligning with the Visible Alpha consensus. Despite declines in key divisions, the company’s adjusted operating income reached $403 million, significantly surpassing the consensus estimate of $238 million. Earnings per share (EPS) also exceeded expectations, coming in at $0.65, more than double the forecasted $0.31. In a strategic move, Estée Lauder announced its expansion into the Amazon.ca Premium Beauty store, enhancing its online presence in Canada. This follows its debut on Amazon.com (NASDAQ:AMZN) in Fall 2024 and marks a significant milestone for the brand’s accessibility in the Canadian market.
Additionally, Deutsche Bank (ETR:DBKGn) upgraded Estée Lauder’s stock rating from Hold to Buy, citing confidence in the company’s diversification strategy beyond China and travel retail channels. Conversely, Moody’s downgraded Estée Lauder’s ratings due to slower-than-expected recovery in credit metrics and uncertainties in the global market. The company also announced a leadership change, appointing Lisa Sequino as the new President of its Makeup Brand Cluster to oversee strategic direction and global growth. Lastly, Berenberg adjusted Estée Lauder’s price target to $61, maintaining a Hold rating after the company’s recent financial disclosures.
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