Estée Lauder Analysts Increase Their Forecasts After Upbeat Earnings

The Estée Lauder Companies Inc. EL reported better-than-expected second-quarter financial results on Monday.

The company reported a sales decline of 7% Y/Y to $4.279 billion, beating the analyst consensus estimate of $4.194 billion. Estee Lauder’s operating income rose 3% Y/Y to $574 million, with the operating margin expanding to 13.4% from 12.0% the prior-year quarter.

Adjusted EPS of 88 cents beat the consensus estimate of 55 cents, according to data from Benzinga Pro.

The company also declared a quarterly dividend of 66 cents per share, payable on March 15, 2024, to stockholders of record at the close of business on February 29, 2024.

Estee Lauder revised its FY24 adjusted EPS outlook to $2.08-$2.23 (from $2.17-$2.42), against the consensus of $2.33 and revised reported sales guidance to a 1% decline – 1% increase (prior view: 2% decline – 1% increase). The company expects third quarter adjusted EPS of $0.36 – $0.46 against the consensus of $0.81 and reported net sales to increase by 3%-5%.

The company further expanded its Profit Recovery Plan for fiscal years 2025 and 2026 to include a restructuring program. The company’s restructuring program aims to boost gross margin, lower the cost base and overhead expenses and increase investments in key consumer-facing activities. In particular, the company aims to reduce its positions by around 3%-5% as of June 30, 2023.

Estée Lauder shares jumped 12.1% to close at $150.28 on Monday.

These analysts made changes to their price targets on Estée Lauder after the company reported quarterly results.

• Telsey Advisory Group raised the price target on Estée Lauder from $115 to $155. Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating.
• Raymond James boosted Estée Lauder price target from $150 to $175. Raymond James analyst Olivia Tong maintained a Strong Buy rating.

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