© Reuters Estee Lauder (EL) ‘on the cusp of a glow-up’ – Berenberg
Estée Lauder (NYSE:) was lifted to Buy from Hold at Berenberg in a note on Wednesday, with a $243 price target.
Berenberg analysts said that the firm is “on the cusp of a glow-up” and that its shares look attractive following a fall since the start of the year.
“Following the stock’s 27% sell-off since the start of 2023, and a 16% rebase of consensus earnings expectations (Institutional Brokers’ Estimate System – IBES – 12-month forward EPS), we now think that the stock offers an attractive buying opportunity for investors,” they wrote.
“Our investment thesis is based on: 1) an inflection in group organic sales growth to 16% in FY24 (from -5% in FY23); 2) a return to the company’s medium-term earnings growth algorithm from FY25 (6-8% organic sales growth, a 50bp annual operating margin improvement); and 3) an attractive risk-reward profile on offer at this share price level (-25% to +60%),” the analysts explained.
EL shares are up 3.8% premarket at $191.69 per share. Berenberg’s price target implies a 35% upside to the stock from Tuesday’s close at $184.67.
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