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Investing.com - RBC Capital has raised its price target on Estee Lauder (NYSE:EL) to $107.00 from $90.00 while maintaining an Outperform rating following the company’s fourth-quarter results. The stock has shown strong momentum with a 21.77% gain over the past six months, despite current trading levels suggesting slight overvaluation according to InvestingPro metrics.
The cosmetics giant reported what RBC described as "solid F4Q results" that fell within the company’s expected range, though fiscal year 2026 earnings per share guidance may have fallen short of optimistic investor expectations. The company maintains impressive gross margins of 73.93% and a healthy current ratio of 1.41, indicating strong operational efficiency and solid liquidity.
RBC believes Estee Lauder’s management is taking appropriate steps to execute a measured return to growth, with assumptions in the company’s outlook considered reasonable given that management’s commentary about the operating environment aligns with beauty industry peers. While currently not profitable over the last twelve months, InvestingPro analysis indicates analysts expect the company to return to profitability this year. Get the full picture with 8 additional exclusive ProTips and comprehensive financial analysis available on InvestingPro.
The investment firm expects Estee Lauder stock to benefit further as increased leverage from the company’s PRGP (Profit Recovery and Growth Program) flows through to financial results.
RBC’s new price target of $107, up from $90 previously, is based on a discounted cash flow analysis, with the firm reiterating its Outperform rating on the stock.
In other recent news, Estee Lauder Companies Inc. announced its fourth-quarter earnings for fiscal 2025, surpassing analyst expectations. The company reported earnings per share (EPS) of $0.09, exceeding the forecasted $0.0828, representing an 8.7% surprise. Despite this earnings beat, there were concerns among investors regarding broader market conditions and future growth prospects. Additionally, Estee Lauder’s stock experienced a decline in pre-market trading, although specific stock price movements are not the focus here. The earnings report reflects the company’s current financial performance and investor sentiment. Analysts had projected different outcomes, and the company’s results have led to varied reactions in the market. These developments are part of the ongoing financial landscape for Estee Lauder.
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