New York-based The Estée Lauder Companies Inc. (EL) manufactures, markets, and sells skin care, makeup, fragrance, and hair care products. With a market cap of $30.5 billion, Estée Lauder's operations span the Americas, Asia Pacific, Europe, Africa, and the Middle East.
Companies worth $10 billion or more are generally described as "large-cap stocks," Estée Lauder fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the household & personal products industry.
Estée Lauder touched its 52-week high of $159.75 on Feb. 5 and is currently trading 47.1% below that peak. EL has declined 28.1% over the past three months, lagging behind the Nasdaq Composite’s ($NASX) marginal gains during the same time frame.
Over the longer term, EL has substantially underperformed NASX. EL has declined 44.9% over the past year and 42.2% in 2024, compared to NASX’s 25% gains over the past 52 weeks and 15.9% returns on a YTD basis.
To confirm the bearish trend, EL has mostly traded below its 50-day and 200-day moving averages over the past year with slight fluctuations.
Shares of Estée Lauder dipped 2.2% after the release of its fiscal 2024 earnings on Aug. 19. The beauty giant has continued to grapple with several challenges, including persistent weak consumer sentiment in China, a downturn in Asia travel retail, and adverse foreign currency translations.
These factors have led to a decline in both revenues and profits. The company reported a 1.9% year-over-year decrease in net sales to $15.6 billion. While its net income attributable to shareholders plummeted by a staggering 61.2% to $390 million.
Looking ahead, Estée Lauder’s fiscal 2025 outlook remains weak, with its reported and organic net sales projected to decline between 5% and 3% versus the prior-year period.
Estée Lauder’s competitor, Coty Inc. (COTY), has outperformed EL. However, COTY has also dipped 23.7% over the past year and 28.6% in 2024.
Among the 27 analysts covering the EL stock, the consensus rating is a “Moderate Buy.” The mean price target of $114.46, represents a 35.4% potential upside from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
