The Estée Lauder Companies Inc. (EL), headquartered in New York, manufactures, markets, and sells skin care, makeup, fragrance, and hair care products. Valued at $37.6 billion by market cap, the company's products are sold through department stores, mass retailers, company-owned retail stores, hair salons, and travel-related establishments.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and EL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the household & personal products industry. EL's strength lies in its diversified portfolio of iconic brands like La Mer, driving premium pricing and loyalty. Its global reach and omnichannel distribution network provide a competitive edge, enabling access to diverse markets and mitigating regional risks.
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Despite its notable strength, EL slipped 16.4% from its 52-week high of $121.64, achieved on Feb. 3. Over the past three months, EL stock has gained 20.1%, outperforming the State Street Consumer Staples Select Sector SPDR ETF’s (XLP) 1.1% gains during the same time frame.
www.barchart.comShares of EL fell 2.9% on a YTD basis, underperforming XLP’s YTD 8.2% gains. However, the stock climbed 14.5% over the past 52 weeks, outperforming XLP’s 4.3% returns over the last year.
To confirm the bullish trend, EL has been trading above its 200-day moving average since mid-August. The stock has been trading above its 50-day moving average since early May, with slight fluctuations.
www.barchart.comEL's outperformance was driven by broad-based organic growth in Skin Care and Fragrance, with 23% of sales from new launches, plus margin expansion from its PRGP restructuring. The company gained share for six straight quarters in Mainland China, returned to double-digit growth in Hainan travel retail, and returned to growth in the U.S. led by The Ordinary ad M·A·C, while guiding to accelerating growth through faster, locally-developed innovation and AI marketing.
On Aug. 19, EL shares skyrocketed 16.3% after reporting its Q4 results. Its adjusted EPS of $0.39 beat Wall Street expectations of $0.32. The company’s revenue was $3.63 billion, surpassing Wall Street forecasts of $3.55 billion. EL expects full-year adjusted EPS in the range of $3.10 to $3.35.
EL’s rival, e.l.f. Beauty, Inc. (ELF) shares have taken the lead over the stock, with a 37.2% uptick on a YTD basis, but lagged behind the stock with 24.4% losses over the past 52 weeks.
Wall Street analysts are reasonably bullish on EL’s prospects. The stock has a consensus “Moderate Buy” rating from the 27 analysts covering it, and the mean price target of $105.52 suggests a potential upside of 3.8% from current price levels.
On the date of publication, Neha Panjwani 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.
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