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On Monday, Piper Sandler adjusted its outlook on Estee Lauder (NYSE:EL) shares, increasing the price target to $122.00 from $114.00, while maintaining the Overweight rating. The move reflects a positive view on the company's near-term prospects, particularly in light of recent economic stimulus measures in China.
The firm's analyst noted adjustments to financial models for both Estee Lauder and competitor Coty (NYSE:COTY) Inc. in preparation for the first fiscal quarter earnings results. While slight downward revisions were made to Coty's near-term estimates due to anticipated pressure on mass market products, the analyst reaffirmed an Overweight rating and a price target of $13 for Coty.
For Estee Lauder, the analyst cited the Chinese government's recent stimulus initiatives as a factor that could provide a minor boost in the short term. This led to an upward revision of Estee Lauder's financial projections and the subsequent increase in the price target.
The analyst expressed confidence in the long-term outlook for both companies, suggesting that despite some short-term challenges, the prestige segment, where Estee Lauder operates, is expected to perform well.
Investors and market watchers will be looking forward to the upcoming earnings results to gauge the impact of market conditions and the analyst's projections on the companies' financial performance.
In other recent news, Coty Inc . has formed its first Scientific Advisory Board to guide skincare research and development, a strategic move to enhance its leading position in skin science. The company has also reported a modest revenue increase of 0.9% in its fourth-quarter results, with like-for-like sales growing by 5% and adjusted EBITDA reaching $164.5 million. However, adjusted earnings per share came in at a loss of $0.03, missing estimates. Coty forecasts a 6-8% growth in like-for-like sales for the first half of fiscal year 2025.
Analyst firms TD Cowen and Canaccord Genuity maintained a Buy rating on Coty, with DA Davidson raising their EBITDA growth expectations for Coty in fiscal year 2025 to 10%. Stifel maintained a Hold rating but lowered the share target, while Citi reaffirmed its Neutral rating. These recent developments reflect the analysts' varied outlooks on Coty's performance in the competitive beauty industry.
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