Estee Lauder (EL) has been rated "Neutral" by Citi, with a revised price target of $77, down from $85, reflecting challenges in the Asia Travel Retail sector and limited visibility on topline growth. The report follows Estee Lauder's F2Q25 earnings, which exceeded expectations with an EPS of $0.62, significantly above the guidance range of $0.20-$0.35. However, the company's F3Q25 guidance disappointed, with expected organic sales growth (OSG) of -8% to -10% and net sales decline of -10% to -12%, indicating ongoing pressures in key markets like Mainland China and Korea.
The new CEO, Stéphane de La Faverie, introduced the "Beauty Reimagined" strategy, aiming for sustainable sales growth and operational efficiency through an expanded restructuring program targeting $800M-$1.0B in savings. Despite these strategic initiatives, Citi remains cautious, citing "low visibility" on future growth and a challenging setup for the second half of FY25. The report notes, "We believe a F2H topline acceleration remains unlikely as EL begins to lap TR replenishment orders."
Estee Lauder's current stock price is $69.30, down 0.24% from the previous close.