Investors in Estee Lauder Companies (NYSE: EL) are reacting positively to recent updates as analysts raise price targets and provide encouraging ratings. On October 30, 2023, Wells Fargo & Company increased its price target for the cosmetics giant from $95.00 to $111.00, maintaining an equal weight rating on the stock. This adjustment reflects a broader trend among analysts who are re-evaluating the company’s market position.
Several other financial institutions have also made notable changes. Goldman Sachs Group upgraded Estee Lauder from a “neutral” to a “buy” rating, increasing their price target from $76.00 to $115.00. This report was released on October 13, 2023. Meanwhile, Royal Bank of Canada raised its price objective from $107.00 to $113.00 and assigned an “outperform” rating to the stock.
Despite these positive assessments, some analysts have expressed caution. Wall Street Zen recently downgraded Estee Lauder from a “buy” to a “hold” rating, while Argus lifted its rating from “hold” to “buy” with a target price of $105.00. Overall, the consensus rating from analysts indicates a “Moderate Buy,” with an average target price of $98.19, according to MarketBeat.
Financial Performance and Future Guidance
Estee Lauder reported its quarterly earnings on October 30, 2023, revealing earnings per share (EPS) of $0.32, surpassing analysts’ expectations of $0.15 by $0.17. Revenue for the quarter was $3.48 billion, exceeding anticipated figures of $3.38 billion. This performance represents a 3.6% increase in quarterly revenue compared to the same period last year, when the company posted an EPS of $0.14.
Looking ahead, Estee Lauder has set its fiscal year 2026 guidance between $1.90 and $2.10 EPS. Analysts project that the company will achieve an average EPS of $1.36 for the current fiscal year.
Dividend Announcements and Insider Activity
On December 15, 2023, Estee Lauder announced a quarterly dividend of $0.35 per share, payable to stockholders of record as of November 28, 2023. This dividend represents an annualized amount of $1.40 and a dividend yield of 1.3%. The company’s dividend payout ratio stands at -54.26%, indicating a reinvestment strategy aimed at supporting growth.
Insider trading activity has also come into focus. Director Barry S. Sternlicht sold 3,972 shares on November 11, 2023, at an average price of $91.83, totaling approximately $364,748.76. Following this transaction, Sternlicht holds 34,812 shares valued at around $3.2 million. Additionally, VP Meridith Webster sold 5,430 shares at an average price of $87.84, amounting to $476,971.20.
Institutional Investors and Ownership Trends
Institutional interest in Estee Lauder has increased, with several large investors adjusting their positions. Asset Dedication LLC raised its stake by 258.7% during the second quarter, acquiring a total of 391 shares now valued at $32,000. Quent Capital LLC and Hantz Financial Services Inc. also made significant acquisitions, further highlighting growing confidence in the company’s future.
Currently, institutional and hedge fund ownership stands at 55.15% of the company’s total stock, reflecting strong backing from larger investors.
Estee Lauder Companies remains a key player in the global beauty market, continually evolving through strategic analysis and investment. Established in 1946 and headquartered in New York City, the company has transformed from a small family operation into a multinational leader in skincare, makeup, fragrance, and hair care products, with a diverse portfolio that includes renowned brands such as Clinique, MAC, and La Mer.
