Estée Lauder's Soft FY26 Guidance Triggers Selloff, Yet Analysts See Buying Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Should l Buy EL?
Source: seekingalpha
- Buying Opportunity Emerges: Citi Research analyst Filippo Falorni highlights that despite Estée Lauder's soft FY26 guidance leading to a selloff, the company's Beauty Reimagined strategy and improvements in its Chinese business present a buying opportunity, reflecting an improving fundamental outlook.
- Sales Environment Recovery: While an incremental headwind is expected in fiscal Q3 2026 due to the Asia travel retail transition, Falorni believes this will be transitory, and many key markets and channels are showing signs of sales environment improvement, indicating a recovery.
- Earnings Expectations and Market Reaction: Estée Lauder's FQ2 profit exceeded expectations, but a 5.8% revenue gain fell short, and the full-year guidance disappointed, causing shares to drop as much as 24% on Thursday, reflecting high investor expectations for a significant beat.
- Competition and Market Strategy: During the pandemic, Estée Lauder's travel retail business was severely impacted, dropping to 15% of its business in FY25; the company is stabilizing and repositioning itself by launching on Amazon and TikTok Shop while adopting a consumer-first strategy aimed at accelerating innovation.
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Analyst Views on EL
Wall Street analysts forecast EL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for EL is 106.76 USD with a low forecast of 70.00 USD and a high forecast of 130.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
8 Buy
9 Hold
1 Sell
Moderate Buy
Current: 96.660
Low
70.00
Averages
106.76
High
130.00
Current: 96.660
Low
70.00
Averages
106.76
High
130.00
About EL
The Estee Lauder Companies Inc. is a manufacturer, marketer and seller of skin care, makeup, fragrance and hair care products. Its product categories include skin care, makeup, fragrance, hair care and others. Its products are sold in approximately 150 countries and territories under a number of brand names, including Estee Lauder, Aramis, Clinique, Lab Series, Origins, M.A.C, Bobbi Brown Cosmetics, La Mer, Aveda, Jo Malone London, Bumble and bumble, Darphin Paris, TOM FORD, Smashbox, AERIN Beauty, Le Labo, Editions de Parfums Frederic Malle, GLAMGLOW, Kilian Paris, Too Faced, Dr.Jart+, and the DECIEM family of brands, including The Ordinary and NIOD. It is a licensee for fragrances, cosmetics and/or related products for AERIN, BALMAIN, and Dr. Andrew Weil. Its skin care products include moisturizers, serums, cleansers, toners, exfoliators, facial masks, body care, sun care products and others. Its makeup products include lipsticks, lip glosses, mascaras, foundations and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Earnings Report: Estee Lauder reported adjusted earnings per share of $0.89 for Q2, exceeding analyst expectations of $0.83, indicating robust demand across regions and categories within its prestige beauty portfolio.
- Sales Growth: The company achieved quarterly sales of $4.229 billion, a 6% year-over-year increase, surpassing the Street's forecast of $4.219 billion, demonstrating its competitive strength in the premium beauty market.
- Upgraded Outlook: Estee Lauder raised its fiscal 2026 adjusted earnings forecast to $2.03-$2.23 per share from $1.90-$2.10, and increased its sales forecast to $14.756 billion–$15.042 billion, reflecting confidence in future growth.
- Positive Stock Reaction: Following the earnings announcement, Estee Lauder's shares rose 5.1% to $101.59, indicating market optimism regarding the company's performance and outlook, despite some analysts lowering their price targets.
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Estée Lauder's Soft FY26 Guidance Triggers Selloff, Yet Analysts See Buying Opportunity
- Buying Opportunity Emerges: Citi Research analyst Filippo Falorni highlights that despite Estée Lauder's soft FY26 guidance leading to a selloff, the company's Beauty Reimagined strategy and improvements in its Chinese business present a buying opportunity, reflecting an improving fundamental outlook.
- Sales Environment Recovery: While an incremental headwind is expected in fiscal Q3 2026 due to the Asia travel retail transition, Falorni believes this will be transitory, and many key markets and channels are showing signs of sales environment improvement, indicating a recovery.
- Earnings Expectations and Market Reaction: Estée Lauder's FQ2 profit exceeded expectations, but a 5.8% revenue gain fell short, and the full-year guidance disappointed, causing shares to drop as much as 24% on Thursday, reflecting high investor expectations for a significant beat.
- Competition and Market Strategy: During the pandemic, Estée Lauder's travel retail business was severely impacted, dropping to 15% of its business in FY25; the company is stabilizing and repositioning itself by launching on Amazon and TikTok Shop while adopting a consumer-first strategy aimed at accelerating innovation.
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- Strong Earnings Report: Estee Lauder reported adjusted earnings per share of $0.89 for Q2, exceeding analyst expectations of $0.83, indicating robust demand across regions and categories within its prestige beauty portfolio.
- Sales Growth: The company achieved quarterly sales of $4.229 billion, a 6% year-over-year increase, surpassing the Street's forecast of $4.219 billion, demonstrating its competitive strength in the premium beauty market.
- Upgraded Outlook: Estee Lauder raised its fiscal 2026 adjusted earnings forecast to $2.03-$2.23 per share from $1.90-$2.10, and increased its sales forecast to $14.756 billion–$15.042 billion, reflecting confidence in future growth.
- Positive Stock Reaction: Following the earnings announcement, Estee Lauder's shares rose 5.1% to $101.59, indicating market optimism regarding the company's performance and outlook, despite some analysts lowering their price targets.
See More
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- Buying Opportunity Emerges: Citi Research analyst Filippo Falorni highlights that despite Estée Lauder's soft FY26 guidance leading to a selloff, the company's Beauty Reimagined strategy and improvements in its Chinese business present a buying opportunity, reflecting an improving fundamental outlook.
- Sales Environment Recovery: While an incremental headwind is expected in fiscal Q3 2026 due to the Asia travel retail transition, Falorni believes this will be transitory, and many key markets and channels are showing signs of sales environment improvement, indicating a recovery.
- Earnings Expectations and Market Reaction: Estée Lauder's FQ2 profit exceeded expectations, but a 5.8% revenue gain fell short, and the full-year guidance disappointed, causing shares to drop as much as 24% on Thursday, reflecting high investor expectations for a significant beat.
- Competition and Market Strategy: During the pandemic, Estée Lauder's travel retail business was severely impacted, dropping to 15% of its business in FY25; the company is stabilizing and repositioning itself by launching on Amazon and TikTok Shop while adopting a consumer-first strategy aimed at accelerating innovation.
See More
Wall Street Analysts Adjust ROKU Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their outlook on ROKU stock, reflecting varying market perceptions that could influence investor decisions and market sentiment.
- Overview of Ratings Update: While specific upgrades or downgrades are not detailed, such changes in analyst ratings typically have a direct impact on stock prices, prompting investors to stay alert for further developments.
- Expected Market Reaction: The adjustments in analyst ratings may lead to short-term volatility in ROKU stock, and investors should consider the significance of these changes in their investment strategies to make informed decisions.
- Source Information: This rating change information is provided by Benzinga, highlighting the critical role analysts play in the market and their potential impact on investor decision-making.
See More
U.S. Stocks Rise as Dow Jones Gains Over 700 Points
- Dow Jones Performance: The Dow Jones index rose over 700 points on Friday, indicating a strong market rebound that reflects investor optimism about economic recovery, which could further drive consumer spending and investment.
- Strategic Shares Surge: Strategy shares jumped 14.1% to $122.56 on Friday, signaling a positive market outlook for the company and potentially attracting more investor interest in its future growth prospects.
- Overall Market Trend: The overall rise in U.S. stocks suggests a restoration of investor confidence, which may lead to increased capital inflows into the stock market, thereby promoting economic growth and corporate earnings.
- Market Data Source: This market update is provided by Benzinga APIs, highlighting improved market information transparency that aids investors in making more informed decisions.
See More
ESTÉE LAUDER STOCK RISES NEARLY 2% FOLLOWING CITIGROUP'S 'BUY' UPGRADE
- Stock Performance: Estée Lauder shares increased by 2% following a positive upgrade from Citigroup Group to a 'buy' rating.
- Market Reaction: The upgrade reflects a favorable outlook on Estée Lauder's performance and potential growth in the beauty market.
See More
Wall Street's Latest Rating Changes Overview
- Amazon Downgrade: DA Davidson downgraded Amazon from Buy to Neutral, citing concerns that Amazon Web Services (AWS) is losing market share amid competition from Microsoft and Google, indicating a potential need for increased investment to regain its leading position in the cloud computing sector.
- Merit Medical Initiation: BTIG initiated coverage on Merit Medical with a Buy rating, highlighting its comprehensive product portfolio used across various interventional procedures, which underscores the company's high-quality positioning and growth potential in the medical device market.
- JBS Buy Rating: UBS initiated coverage on Brazilian meat company JBS with a Buy rating and a price target of $19.5 per share, implying a 23% upside, reflecting market confidence in its re-rating and potential stock price appreciation.
- Vistra Upgrade: Goldman Sachs upgraded Vistra from Neutral to Buy, projecting a potential EBITDA increase of 3-9% by 2028, indicating investor optimism regarding its future profitability and growth prospects in the nuclear energy sector.
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