Throughout most of Thursday, Estee Lauder ( EL -0.08% ) The stock was trading positively, largely thanks to an analyst’s upgrade recommendation, which followed several important recent announcements from the company and included a substantial increase in the price target. However, by the end of trading, the renowned cosmetics company’s stock had dipped slightly into negative territory, although just barely, as did the stock of another equally established company. S&P 500 the index decreased by 0.9%.
A recommendation adjustment following earnings announcements
That improvement originated from Piper Sandler Korinne Wolfmeyer upgraded her recommendation for Estee Lauder from neutral to overweight (meaning buy) before the market opened. Wolfmeyer also substantially increased her target price rising from $95 per share to $114.
The decision was made a few days following Estee Lauder’s announcement of its fiscal fourth-quarter earnings for 2024. Despite exceeding the analysts’ consensus estimate for revenue and significantly surpassing expectations for net income, the company’s profit forecast for the fiscal year 2025 was much lower than what experts had anticipated.
In a significant update, Estee Lauder revealed that their long-time employee CEO Fabrizio Freda is set to retire when fiscal year 2025 concludes.
A rising stock in a declining market?
Despite this, Wolfmeyer had many reasons to remain optimistic about both the company and the broader prestige beauty sector. “After reviewing Monday’s FQ4 earnings report and the revised estimates, we feel much more assured about the current valuation levels and have greater confidence in the updated future projections.”
It’s important to mention that the analyst stands out compared to her colleagues. Several of them have lowered their price targets for the shares, but none have changed their recommendations at this point.
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