What Happened?
Shares of beauty products company Estée Lauder (NYSE: EL) jumped 3.5% in the afternoon session after an analyst at Evercore ISI Group reiterated a positive outlook on the company, raising the firm's price target.
Evercore ISI analyst Robert Ottenstein maintained an "Outperform" rating on the beauty products giant while increasing the price target to $115 from $100. This 15% upward adjustment in the target price signals a more bullish view from the analyst firm. The new target suggests a potential upside of nearly 33% for the stock over the next twelve months, offering a positive signal to investors after the stock had recently experienced a downward trend.
After the initial pop the shares cooled down to $86.72, up 3.7% from previous close.
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What Is The Market Telling Us
Estée Lauder’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock gained 3.8% on the news that the stock rebounded amid a broader market rally as Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts. The broad market optimism, which saw the Dow Jones Industrial Average surge over 700 points, overshadowed Estée Lauder's own recent negative news. Just the day before, the company reported a net loss of $1.13 billion for fiscal 2025, marking its third straight year of falling sales. The beauty giant's fourth-quarter net sales declined 12% year-over-year, and it also warned of a potential $100 million impact from tariffs, leading to an annual profit forecast below analyst estimates. The stock had fallen on this news, but today's positive market-wide sentiment is fueling a recovery.
Estée Lauder is up 17.2% since the beginning of the year, but at $86.72 per share, it is still trading 14% below its 52-week high of $100.78 from September 2024. Investors who bought $1,000 worth of Estée Lauder’s shares 5 years ago would now be looking at an investment worth $398.24.
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