Estee Lauder Companies Inc. (NYSE:EL) CEO Fabrizio Freda recently sold shares of the company's Class A Common Stock, according to a recent SEC filing. Freda sold 10,969 shares at a price of $67.76 each, amounting to a total transaction value of $743,259. Following this sale, Freda retains ownership of 295,838 shares.
The filing also disclosed several transactions involving restricted stock units (RSUs). Freda acquired 19,833 shares through the vesting of RSUs granted in 2021, 2022, and 2023. Additionally, 4,788 shares were converted from RSUs with no price per share applicable, and 7,053 and 7,992 shares were similarly converted from RSUs, reflecting the vesting of previously granted units.
These transactions reflect routine adjustments as part of Freda's compensation package, including the conversion of RSUs and the sale of shares to cover tax obligations.
In other recent news, Estee Lauder has seen several significant developments. The company's Q1 earnings per share exceeded expectations, reaching $0.14, up from last year's $0.11. However, due to persistent sales declines in China and Asia Travel Retail markets, Estee Lauder withdrew its full-year outlook for fiscal 2025 and reduced its quarterly dividend from $0.66 to $0.35 per share. The company reported a 5% decline in organic sales in Q1 of fiscal 2025, largely due to downturns in mainland China, global travel retail, and Hong Kong SAR.
Estee Lauder has also undergone major leadership changes with Stéphane de La Faverie appointed as the new President and CEO, effective January 1, 2025. Akhil Shrivastava has taken over as CFO. Analysts from TD Cowen, Telsey Advisory Group, and JPMorgan have adjusted their outlooks for Estee Lauder, with TD Cowen and Telsey Advisory Group reducing their price targets while JPMorgan downgraded the stock from Overweight to Neutral.
B.Riley has also adjusted its outlook on Estee Lauder, reducing the price target to $70 from $95 while keeping a Neutral rating on the stock. The firm's analyst cited a significant downturn in consumer sentiment in China as the main reason for the revision. B.Riley now anticipates a 10% decrease in Asia-Pacific (APAC) revenue for Estee Lauder in fiscal year 2025, a stark contrast to the previously estimated 2% decline.
InvestingPro Insights
The recent stock transactions by Estee Lauder's CEO Fabrizio Freda come at a challenging time for the company. According to InvestingPro data, Estee Lauder's stock has experienced significant declines, with a 25.13% drop in the past week and a 30.68% fall over the last month. This downward trend is further emphasized by the stock trading near its 52-week low, as highlighted by one of the InvestingPro Tips.
Despite these short-term challenges, Estee Lauder maintains some fundamental strengths. The company boasts impressive gross profit margins of 72.36% for the last twelve months, which aligns with an InvestingPro Tip noting the company's "impressive gross profit margins." This indicates that Estee Lauder still maintains strong pricing power and cost management in its core operations.
It's worth noting that Estee Lauder has a history of consistent dividend payments, having maintained them for 29 consecutive years. The current dividend yield stands at 2.11%, which may attract income-focused investors despite the recent stock price decline.
For investors considering Estee Lauder's valuation, the company's P/E ratio (adjusted) for the last twelve months is 30.89, which is considerably lower than the current P/E of 116.92. This discrepancy suggests that analysts expect earnings to improve in the near future.
These insights are just a sample of the valuable information available. InvestingPro offers 13 additional tips for Estee Lauder, providing a more comprehensive analysis for investors looking to make informed decisions about the company's stock.
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