Estée Lauder outperforms on Wall Street, buoyed by analyst upgrade
Estée Lauder shares outperformed the US stock market on Friday following an "Overweight" initiation by analysts at Piper Sandler, who highlighted the gaining momentum of the cosmetics group's operational turnaround.
The broker, which set its target price for the share at $95, noted that three of the company's four primary business segments generated organic growth over the past quarter, with stabilization in the Americas region accompanied by market share gains across all product categories.
It added that the guidance provided for FY 2026/2027 suggests a continued inflection in top-line revenue.
Valuation accounts for the Puig scenario
Regarding the possibility of a tie-up with Spain's Puig, Piper Sandler acknowledged that such a transaction could complicate the business recovery, despite the benefits it offers in terms of diversification and profitability. However, the firm believes these concerns are already reflected in the stock's valuation, which is currently trading at a 2027 EV/Ebitda multiple of 12x, compared to 16x over the past two years. The stock limited its decline to 0.7% at $80.3, bringing its year-to-date losses to about 24% for a market capitalization of $29bn. At the same time, the S&P 500 index was down 1.2%.
The Estée Lauder Companies Inc. is one of the 1st world cosmetics groups. Products are sold under brands (Estée Lauder, Aramis, Clinique, Lab Series, Origins, M·A·C, Bobbi Brown, La Mer, Aveda, Jo Malone London, Bumble and bumble, Darphin, TOM FORD, Smashbox, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced, Dr.Jart+, The Ordinary and NIOD) and under brands of licenses (AERIN, BALMAIN and Dr. Andrew Weil). Net sales break down by family of products as follows:
- skin care products (48.6%);
- make-up products (29.4%);
- perfumes (17.4%);
- hair care products (3.9%);
- other (0.7%).
At the end of June 2025, products are marketed through about 1,600 outlets worldwide, distributed between large stores, perfume shops, pharmacies, beauty institutes and exclusive shops, and via Internet.
Net sales are distributed geographically as follows: Americas (30.8%), Europe/Middle East/Africa (37.5%) and Asia/Pacific (31.7%).
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