Estée Lauder Faces Major Stock Decline Amid Market Pressures

The report outlines significant concerns for Estée Lauder, revealing that the company's shares have drastically underperformed the market. With a decline of 56.4% in 2024 alone and a forecasted EPS drop of 38.6%, investor sentiment appears to be adversely affected.

Date: 17-11-2024

AI Rating: 4

The report highlights the ongoing struggles of The Estée Lauder Companies Inc. (EL), specifically its sharp decline in stock price compared to the broader market and its sector.

Stock Performance: Estée Lauder's stock has dropped by 49.4% over the past year, while the S&P 500 has gained nearly 30.4%. This stark contrast indicates significant underperformance, suggesting negative investor sentiment.

Earnings Per Share (EPS): Analysts expect EL’s EPS to decline by 38.6% to $1.59 for the fiscal year ending June 2025. Such a sharp decline in earnings expectations can negatively affect investor outlook and stock prices.

Analyst Recommendations: The consensus rating for EL has shifted to a 'Hold' as of recent evaluations, down from a 'Moderate Buy.' This downgrade reflects less bullish sentiment among analysts, which could further dampen investor confidence.

Price Targets: Following a recent downgrade from B. Riley Financial, the price target reduced to $70 from $95 reflects concerns over market slowdown and uncertainty regarding EL’s future growth. Though the mean price target suggests a 28.1% premium from current levels, achieving this targets a high level of optimism amid challenges.

In summary, the combination of declining stock performance, negative EPS forecasts, and shift in analyst recommendations can lead to further downward pressure on EL's stock price. Given these factors, investors may want to exercise caution when considering positions in Estée Lauder.

Stocks: EL