The Estée Lauder Companies (EL) has received a new Buy rating, initiated by Bank of America Securities analyst, Ashley Wallace.
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Ashley Wallace has given his Buy rating due to a combination of factors that highlight The Estée Lauder Companies’ potential for growth and recovery. The company, being the second-largest player in the global prestige beauty market, is expected to benefit from its ‘Beauty Reimagined’ plan, which aims to drive an earnings recovery. This plan includes a forecasted 4% revenue CAGR and significant margin expansion by FY27E, positioning the company above consensus expectations.
Furthermore, the prestige beauty market is poised for cyclical growth, with signs of recovery in key regions such as China, where demand has recently accelerated. The company’s strategic initiatives, including innovation and channel expansion, along with cost-saving measures, are expected to enhance operational efficiency and market competitiveness. Trading at a discount compared to peers, Estée Lauder’s improved market conditions and execution could serve as catalysts for a stock re-rating, supporting the Buy recommendation.
According to TipRanks, Wallace is a 3-star analyst with an average return of 3.6% and a 59.62% success rate.
In another report released on July 8, RBC Capital also maintained a Buy rating on the stock with a $90.00 price target.