UBS Group has raised its price target for Estee Lauder Companies (NYSE: EL) from $105.00 to $119.00, as indicated in a research note released on Wednesday. The investment firm maintains a neutral rating on the stock, reflecting a cautious optimism amid a flurry of recent analyst upgrades.
In a broader context, Estee Lauder has attracted attention from several financial institutions. Raymond James Financial upgraded the company from a “market perform” to a “strong-buy” rating, setting a price target of $130.00 on January 5, 2024. Similarly, the Telsey Advisory Group increased its target from $99.00 to $105.00, rating it as a “market perform” on October 31, 2023.
On the same day, the Royal Bank of Canada also nudged its target price higher, from $107.00 to $113.00, while maintaining an “outperform” rating. In another positive development, Canaccord Genuity Group raised its target from $85.00 to $100.00, assigning a “hold” rating.
Analysts have mixed views on Estee Lauder’s performance, with three rating it as a “strong buy,” ten giving it a “buy,” and ten maintaining a “hold” stance. According to data from MarketBeat.com, the overall average rating stands at “moderate buy,” with an average target price of $100.50.
Financial Performance and Future Outlook
Estee Lauder Companies released its quarterly earnings on October 30, 2023, reporting an earnings per share (EPS) of $0.32. This exceeded the consensus estimate of $0.15 by $0.17. The company achieved revenue of $3.48 billion for the quarter, surpassing analyst expectations of $3.38 billion. This marks a 3.6% increase in revenue compared to the same quarter last year.
Looking ahead, Estee Lauder has issued guidance for fiscal year 2026, projecting an EPS between $1.90 and $2.10. Analysts expect the company to post an average EPS of $1.36 for the current fiscal year.
Dividend and Insider Transactions
The firm recently declared a quarterly dividend of $0.35, which was paid on December 15, 2023. Shareholders who were on record as of November 28, 2023, received this dividend, resulting in an annualized yield of 1.2%. Estee Lauder’s payout ratio currently stands at -54.26%.
In related news, Director Barry S. Sternlicht sold 3,972 shares on November 11, 2023, at an average price of $91.83, totaling approximately $364,748.76. After this transaction, Sternlicht retained 34,812 shares valued at around $3,196,785.96, reflecting a decrease in his ownership by 10.24%. Similarly, VP Meridith Webster sold 5,430 shares on November 18, 2023, for about $476,971.20. Currently, corporate insiders own 13.05% of the stock.
Institutional Investor Activity
Hedge funds have recently adjusted their holdings in Estee Lauder. Norges Bank acquired a new stake valued at $189,663,000 during the second quarter of 2023. Victory Capital Management Inc. dramatically increased its stake by 3,181.4% in the third quarter, now owning approximately 2,312,535 shares worth $203,781,000 after acquiring an additional 2,242,062 shares.
In a similar vein, Wellington Management Group LLP raised its holdings by 3,986.4% during the same period, now owning 2,082,217 shares valued at $183,485,000. Additionally, Bank of New York Mellon Corp increased its stake by 46.4%, owning 6,112,501 shares valued at $538,634,000.
Overall, institutional investors and hedge funds now hold 55.15% of Estee Lauder’s stock, reflecting a robust interest in the company’s potential.
Founded in 1946 by Estee Lauder, the company has evolved into a global leader in prestige beauty, developing, manufacturing, and marketing a diverse array of skincare, makeup, fragrance, and hair care products. With its headquarters in New York City, Estee Lauder’s portfolio includes renowned brands such as Clinique, MAC, and La Mer, catering to various consumer segments and price points.
