In a report released yesterday, Mark Astrachan from Stifel Nicolaus maintained a Hold rating on The Estée Lauder Companies (EL – Research Report), with a price target of $77.00.
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Mark Astrachan has given his Hold rating due to a combination of factors impacting The Estée Lauder Companies. One of the primary reasons is the company’s ongoing struggle to regain market share, which has been declining in recent years. Astrachan notes that efforts to improve sales growth appear insufficient, as the company’s organic sales growth has lagged behind its major competitors since 2022. The unchanged advertising expenditure, in particular, suggests a need for increased investment to drive consumer engagement.
Moreover, Astrachan expresses concerns over the recent leadership changes, indicating that the new team structure might complicate decision-making processes at a time when agility is crucial. The company’s ambitious restructuring plan, aimed at achieving operational efficiency, involves significant workforce reductions and high restructuring costs. While these efforts are part of a broader strategic initiative to streamline operations, the financial implications and potential risks associated with these changes contribute to his cautious stance on the stock.
According to TipRanks, Astrachan is a 5-star analyst with an average return of 13.8% and a 62.27% success rate. Astrachan covers the Consumer Defensive sector, focusing on stocks such as Monster Beverage, Procter & Gamble, and Target.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $71.00 price target.