Estee Lauder Companies Inc. (EL) has been reiterated at a "Neutral" rating by BofA Global Research, with a revised price objective of $85, down from $90. This adjustment follows the company's strategic shift under new CEO Stéphane de La Faverie, who is focusing on recovery and growth in the U.S. market. The report highlights Estee Lauder's efforts to enhance its U.S. market share through increased innovation and marketing, particularly leveraging Amazon distribution. However, challenges persist in the Asia Travel Retail sector, with sales and profits rebasing lower, and the impact of anti-Daigou regulations affecting Korean Travel Retail.
BofA has lowered its earnings estimates for Estee Lauder, projecting 2025 EPS at $1.25, down from $1.47, and 2026 EPS at $2.68, down from $2.88. The report notes, "Margin recovery is now more dependent on hard cost saves and less on sales leverage and mix." Estee Lauder's path to achieving $3.00 EPS by FY27 is seen as contingent on sustained U.S. market improvements and cost management.
Estee Lauder was trading at $68.16, down 1.89% on February 5, at 9:40.