ESTEE LAUDER $EL guidance $146 @ Barron's article ...ESTEE LAUDER $EL guidance $146 @ https://www.barrons.com/articles/estee-lauder-stock-lows-wall-street-2174801 ... no doubt imho dramatically lower thereafter to perhaps recent 80's.
stock was dropping Monday after a flurry of Wall Street analysts lowered their price targets on the cosmetics company following a weaker-than-anticipated 2024 forecast.
Este Lauder ‘s (ticker: EL) 2024 earnings guidance missed Wall Street estimates on Friday, overshadowing a strong fourth-quarter report. This led some already-skeptic analysts to cut their price targets on the maker of beauty products, amid concerns that issues within the Asia travel market will continue.
Worries over China’s economy have been growing amid grim economic data. China’s economy grew 0.8% in the second quarter, which was lower than the growth in the first half from the same time last year.
Este Lauder management said on the company’s earnings call Friday that the “global travel retail business decreased 34% organically in fiscal year 2023, solely driven by Asia travel retail.” Management added that the weakness in Asia travel retail put heavy pressure on skin care, which is the company’s highest-margins category.
Shares of the cosmetics giant are down 3.2% to $151.62 in Monday trading. They’ve slipped 15 of the latest 16 trading days, and are on pace for their lowest close since April 2020, according to Dow Jones Market Data.
D.A. Davidson analyst Linda Bolton Weiser cut her price target on the stock to $185 from $214 and slashed her full-year earnings estimates by 19% to $3.50 a share.
“In May and June, retail sales trends deteriorated and turned steeply negative in the Hainan region of China. Additional efforts are required to further reduce inventory in the Asian travel retail channel,” Weiser said. She maintained her Buy rating on the stock.
Weiser was not the only analyst to remain bullish on Este Lauder. Raymond James analyst Olivia Tong cut her price target on the stock to $195 from $220 but maintained her Strong Buy rating.
“Clearly the challenges in Asia travel retail are weighing heavily, with macro deterioration in China a further concern, but given the quick recovery in Western markets, upcoming innovation, pricing, and increased advertising, we see a path towards recovery as FY24 unfolds,” Tong wrote in a research note.
Canaccord Genuity Capital Markets analyst Susan Anderson trimmed her price target to $146 from $162 and maintained her Hold rating. Anderson wrote in a research note that “despite recent positive news around potential catalysts for recovery, such as the resumption of allowing group tours for Chinese citizens, the macro picture in the Mainland looks bleak.”
“We remain cautious on EL in the near term as we await to see how a potential recovery in Asia travel retail plays out…and how Chinese consumers respond to worsening macro conditions,” Anderson added.