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Investing.com - Citi has raised its price target on Estee Lauder (NYSE:EL) to $95.00 from $60.00 while maintaining a Neutral rating on the stock. According to InvestingPro data, the company maintains impressive gross profit margins of 74% and operates with a moderate debt level, though it hasn’t been profitable over the last twelve months.
The firm projects a challenging quarter for Estee Lauder with organic sales growth declining 12.5% in fiscal fourth quarter 2025, worsening from the 9% decline seen in the previous quarter. This deterioration comes as the company laps significant travel retail replenishment orders from the same period last year. The company’s revenue has already declined by 3.7% over the last twelve months, with analysts on InvestingPro anticipating further sales decline in the current year.
Additional headwinds identified by Citi include lower retail order shipments in the Americas, with some retailers managing inventories more tightly and impacts from distressed retailers like Hudson (NYSE:HUD) Bay. The challenging consumer environment in China continues to affect performance.
Despite these challenges, Citi expects Estee Lauder to deliver fiscal fourth quarter earnings per share of $0.14, exceeding both the company’s guidance of -$0.12 to $0.13 and the consensus estimate of $0.08. This projection reflects the company’s tendency to provide conservative quarterly guidance.
Citi notes that while some positive indicators for fiscal year 2026 exist, these trends are already reflected in the stock price, which has risen approximately 80% since its April low. The firm suggests this increase has been driven more by positive sentiment toward China-exposed names rather than fundamental business improvements.
In other recent news, Estee Lauder Companies has seen several key developments. Analysts have been active, with HSBC upgrading Estee Lauder from Hold to Buy, citing potential earnings growth from cost-cutting measures and efficiencies. HSBC raised its price target to $99.00, noting that earnings could double between fiscal years 2025 and 2027. Similarly, Deutsche Bank (ETR:DBKGn) upgraded the stock to Buy, increasing its price target to $95.00, reflecting confidence in Estee Lauder’s diversification strategy beyond China and its completed infrastructure investments. Evercore ISI also raised its price target to $100.00, maintaining an Outperform rating, and highlighted Estee Lauder’s improving market share in key regions and potential sales growth. BofA Securities resumed coverage with a Buy rating, projecting a 4% revenue growth rate and margin expansion by fiscal year 2027. In corporate governance news, Estee Lauder announced that board members Lynn Forester de Rothschild and Angela Wei Dong will not stand for re-election at the 2025 Annual Meeting. Both directors will serve until their terms end, with their decisions not linked to disagreements with the company.
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