Consumer Discretionary

Estee Lauder (EL) is positioned to be a “more competitive enterprise” with its restructuring plan, RBC Capital Markets said in a note to clients Tuesday. Estee Lauder on Monday announced a two-year restructuring program to generate $350 million to $500 million in annual gross benefits as part of its profit recovery plan. The restructuring includes a 3% to 5% reduction of its workforce globally. “We see [the restructuring plan] as a constructive step in the right direction, but remain on the sidelines until we see evidence that [Estee Lauder] is executing on its plan,” said RBC analysts. The investment firm raised its price target on Estee Lauder to $131 from $115 given increased profitability estimates tied to the profit recovery plan, and kept its sector perform rating. The company said Monday it forecasts incremental operating profit of $1.1 billion to $1.4 billion, an increase from the prior $800 million to

Estee Lauder’s restructuring efforts will help the beauty giant meet or even exceed its new guidance, which remains conservative, JPMorgan analysts say in a research note. There is evidence that demand trends have worsened sequentially in Mainland China, but consumption has been outpacing shipments as retailers take their inventories down, analysts add. JPMorgan raises its target price to $167 from $150 previously to reflect the new guidance, innovation prospects, details on the most recent trends across regions, and raised profit recovery plan. Shares drop 2.4% to $146.76.

JPMorgan analyst Andrea Teixeira maintains Estee Lauder Cos (NYSE:EL) with a Overweight and raises the price target from $150 to $167.

Estee Lauder’s expanded recovery plan could be the start of a new beginning for the cosmetics company, Wells Fargo analysts say in a research note. “Estee Lauder isn’t perfect, but with the potential for a sales inflection in the 2H, into margin recovery FY25/26, it may not be long before it sees prospects for upside to EPS,” say the analysts, which could bring the stock back above $200. But Wells Fargo warns, if Estee Lauder doesn’t see a recovery in Asia Travel Retail/China, and trends worsen outside of these geographies, earnings could stagnate. Wells Fargo raises its target price to $175 from $155 previously. Shares drop 2.9% to $145.97.