The Estée Lauder Companies Inc. (EL), with a market cap of $45.20 billion, is a global leader in the beauty industry. Headquartered in New York, the company is renowned for its high-quality skincare, makeup, fragrance, and hair care products. Esteé Lauder's prestigious brands, including Estée Lauder, Clinique, MAC, Bobbi Brown, and La Mer, are synonymous with luxury and innovation. As the leading producer of premium beauty products, the company operates in over 150 countries, setting industry standards for excellence. 

Estée Lauder has significantly underperformed the broader market over the last year. The stock has declined 33.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. In 2024 alone, the stock has lost 13.8%, compared to SPX's 11.2% gains on a YTD basis.

Narrowing the focus, EL’s underperformance is also evident when compared to the Roundhill S&P Global Luxury ETF (LUXX). The exchange-traded fund has declined by 1% YTD, while EL has experienced a significantly more loss over the same period.

On May 1, Estée Lauder's shares slumped 11.3% after releasing its Q3 report despite exceeding Wall Street’s EPS and revenue estimates. Essentially, the company’s guidance disappointed investors. The stock ended the trading session with a loss of 13.2%. 

For the current fiscal year, ending in June 2024, analysts expect EL’s EPS to decline by 35.8% year over year to $5.21 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in each of the last four quarters.

Among the 26 analysts covering EL stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings and 17 “Holds.” 

This configuration is slightly more bullish than three months ago, with eight suggesting a “Strong Buy.”

On May 2, Christopher Carey from Wells Fargo maintained a “Buy” rating on The Estée Lauder, with a price target of $163.00. However, Dara Mohsenian from Morgan Stanley downgraded Estée Lauder to a “Hold” with a price target of $140.00.

The mean price target of $151.25 represents a 20% premium to EL’s current price levels. The Street-high price target of $200 suggests an ambitious upside potential of 58.7%.

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On the date of publication, Rashmi Kumari 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.