The Estée Lauder Companies Inc. Stock Price Targets
Comprehensive analysis of short, mid, and long-term price targets for The Estée Lauder Companies Inc. (EL).
Give me a comprehensive price target analysis for The Estée Lauder Companies Inc. (EL).
Here is a comprehensive analysis of Estée Lauder Companies Inc. (EL) with the three horizontal target lines drawn as requested.
Drawing status
- Low Target line at 61.00 drawn in green
- Median Target line at 90.00 drawn in blue
- High Target line at 120.00 drawn in red
- Extensions: All three lines extended 30 days into the future from 2025-10-02 to 2025-11-01
- Reference line IDs (from drawing tool):
- 61.00 line: line_id 780ef8e005ff4c2db9171cf2f7484b56
- 90.00 line: line_id 097c5a2f0dc647e39827cd6d1aabadce
- 120.00 line: line_id 5e5a7ec15bd04bc4944f29f4ce66ade8
Executive Summary
- Price targets vs. current price: EL trades at 86.20 with a low target of 61, a median target of 90, and a high target of 120. The mean/consensus target is 92.35 (23 analysts). This implies modest upside to the median/mean targets and meaningful upside if the high target plays out, but material downside risk if downside catalysts materialize.
- Investment thesis: EL remains a premium beauty brand portfolio with strong gross margins and resilient cash generation, yet the recent earnings backdrop shows meaningful headwinds from costs and non-cash charges that have driven earnings volatility. With a forward P/E around 32 and a debt-heavy balance sheet, the stock’s upside hinges on margin stabilization, earnings quality improvement, and a favorable macro consumer backdrop.
- Key risk/reward: The stock has leverage exposure (debt-to-equity
245%), and net margins are negative (-7.9% trailing). However, cash balance ($2.92B) and robust gross margins (~73.96%) provide optionality for margin recovery and shareholder-friendly actions. The price technically sits near 50-day MA resistance (around the low-to-mid $80s-to-$90s region historically) with MACD currently negative and RSI in the mid-40s, implying limited near-term momentum but potential for a re-rating if earnings quality improves.
Fundamental Analysis
- Valuation and financial health
- Current price: 86.20
- Market cap: $31.23B
- Enterprise value: $37.57B
- Forward P/E: 31.93
- Trailing P/E: not meaningful (negative/undefined in current data)
- Price-to-book: 8.02
- Return on equity (ROE): -24.69%
- Return on assets (ROA): 3.40%
- Profit margins: -7.91%
- Gross margins: 73.96%
- Operating margins: 4.43%
- Debt-to-equity: 244.94x
- Total cash: $2.92B
- Total debt: $9.47B
- Dividend yield: 1.62%
- Five-year average dividend yield: 1.5%
- Beta: 1.15
- Interpretation
- The business shows healthy gross margins and a positive operating margin, but net margins are negative and ROE is negative, reflecting earnings quality headwinds and potentially material one-time or restructuring charges (as evidenced in the earnings summary). High leverage (debt-to-equity) elevates financial risk, particularly if consumer demand softens or if margins don’t stabilize.
- The forward multiple (P/E ~32) appears to price in continued margin stabilization and earnings growth, but the debt load and negative net income in the latest period warrant caution.
Earnings Analysis
- Recent Earnings Summary (latest quarter: 2025-06-30)
- Net income from continuing operations: -$546M
- Diluted EPS: -$1.51
- EBITDA: -$153M
- Operating income: $141M
- Gross profit: $2.456B
- Total revenue: $3.411B
- Notable items: Large negative “Total Unusual Items” of -$531M and a Tax provision around $95M; the combination drives a negative net income despite a positive operating/income line and solid gross margin.
- EPS Trend (trailing/forward-looking pattern)
- 0q (most recent): 0.16737
- +1q: 0.80784
- 0y: 2.0933
- +1y: 2.85796
- Interpretation: The EPS trend displays a sequence of growth from the near-term quarter into the next year, but the magnitude in the reported quarter was negative due to unusual charges. The data imply growth expectations over the next several quarters/years, though actual earnings quality hinges on operating factors and non-routine items.
- EPS Revisions
- 0q: upLast7days = 2, upLast30days = 2, downLast30days = 14, downLast7Days = 14
- +1q: upLast7days = 4, upLast30days = 3, downLast30days = 13, downLast7Days = 12
- 0y: upLast7days = 0, upLast30days = 4, downLast30days = 18, downLast7Days = 1
- +1y: upLast7days = 0, upLast30days = 3, downLast30days = 10, downLast7Days = 1
- Interpretation: The revisions data show more downgrades than upgrades in recent periods, which adds a bias toward caution on near-term earnings expectations despite longer-horizon improvement hints.
- Earnings quality takeaway
- While gross margins remain robust and operating income can be positive, the negative net income and negative EPS in the most recent quarter suggest earnings quality is being challenged by unusual or non-operating costs and potential impairment/restructuring charges. The presence of a large “Total Unusual Items” line underscores earnings volatility and suggests attention to non-recurring items when evaluating profitability.
Technical Analysis
- Current price action
- Last price: 86.20
- 50-day MA (latest): 89.20 (as of 2025-10-01)
- Price relative to 50-day MA: Trading below the 50-day moving average, implying potential near-term weak momentum or a risk-off stance.
- RSI (14): ~48.6 (neutral-bearish zone)
- MACD (12,26,9): MACD around -0.5 with a matching Signal near -0.5, indicating bearish momentum at the latest reading.
- Moving averages
- 50-day MA is in the high 80s to low 90s region in recent data; the current price sits just below it, offering a potential near-term resistance at or around the MA level.
- RSI and momentum
- RSI around 48.6 suggests modest downside risk but not oversold, allowing for potential revival if catalysts appear.
- MACD
- MACD negative with little signal of immediate bullish cross, indicating caution on near-term momentum unless fundamentals or sentiment improve.
Analyst Consensus & Price Targets
- Current analyst targets (23 analysts)
- Target Low: $61.00
- Target Mean: $92.34783
- Target Median: $90.00
- Target High: $120.00
- Current price: $86.20
- Number of analysts: 23
- Interpretation
- The median target (90) and mean target (92.35) sit modestly above current prices, implying limited upside under a central scenario. The high target of 120 suggests a bullish upside case, but the wide range indicates divergent views among analysts, and the relatively elevated forward multiple warrants a cautious stance given earnings volatility and leverage.
Price Target Analysis (Short, Mid, Long-Term)
- Short-Term (3 months)
- Target: ~90 (median) vs. current price 86.2
- Justification: Near-term stabilization in earnings, light positive earnings revisions, and a reversion toward the 50-day MA could help lift sentiment toward the median target. Key drivers: stabilization of gross margin and improving operating leverage; potential catalysts include better-than-expected quarterly margins, cost controls, and favorable product-category performance.
- Potential drivers/risks: If the company continues to incur unusual items or if consumer demand deteriorates, downside risk remains toward the low end (61) from the analyst set.
- Mid-Term (12 months)
- Target: ~92–95 (mean/median around 92–92.5)
- Justification: The combination of improving earnings quality (supported by EPS trend signaling growth over the next year) and a potential re-rating if the debt burden is managed and free cash flow improves. The forward P/E around 32 may compress if growth remains elusive, but margin stabilization could unlock earnings growth.
- Key drivers: Margin stabilization, continued top-line resilience, operating efficiencies, and constructive revisions in upcoming quarters; risk includes sustained high leverage, macro headwinds, and any deterioration in consumer demand.
- Long-Term (3+ years)
- Target: up to 120 (high target)
- Justification: If EL can sustain brand power, expand in high-growth markets, and meaningfully improve earnings quality (reducing the drag from unusual charges), the long-term valuation can upscale toward the high target.
- Key drivers: Structural margin expansion, successful portfolio optimization, cost discipline, brand growth in emerging markets, potential share repurchases, and favorable macro consumer trends.
- Risks: Ongoing leverage risk, potential regulatory and supply-chain headwinds, and competitive pressure in premium cosmetics.
Key Risks & Opportunities
- Major risks
- Heavy leverage (debt-to-equity ~245%) heightens financial risk in a weak consumer environment or rising rates.
- Negative trailing net margin and occasional large unusual items undermine earnings quality and cash flow visibility.
- Earnings revisions show more downgrades than upgrades in recent periods, signaling near-term earnings risk.
- Dependence on premium brand performance and macro consumer sentiment; shifts in travel, beauty trends, or currency headwinds can affect revenue.
- Key opportunities
- Sustained gross margin strength provides cushion for margin recovery and deleveraging over time.
- Brand portfolio strength and product innovation can support a durable revenue base and pricing power.
- Potential operational improvements and cost optimization could improve EBIT and cash flow, aiding a multiple expansion.
Investment Recommendation
- View: Hold to Moderate Buy (with time horizon 12–24 months)
- Rationale
- The current price sits just below near-term resistance (50-day MA) and modest upside to the median/mean targets offers a reasonable mild upside scenario if earnings quality improves and leverage is managed.
- The upside scenario (mean/median targets around 90–92) is limited in the near term due to earnings volatility and the debt burden, but a longer horizon could unlock higher equity value if margin stabilization and growth in cash flow occur.
- Expected return potential (12–24 months)
- Baseline: ~6–10% upside to the mean/median targets (around 92–92.5) from 86.2, subject to earnings quality improvements and leverage management.
- Bull case: Up to ~39% upside toward the high target of 120 if the earnings quality improves meaningfully, debt is managed, and the market prices in higher-margin growth in top markets.
- Bear case: Downside risk toward the low target (61) or further if non-recurring charges persist or if consumer demand deteriorates and leverage remains a constraint.
Technical Observations (summary)
- The stock is trading below the near-term 50-day MA (latest MA around 89.2 vs price 86.2), suggesting potential near-term downside pressure unless catalysts emerge.
- RSI around the mid-40s to 50s indicates neutral momentum—no overbought context but not particularly oversold either.
- MACD is negative, indicating current momentum is modestly bearish.
- The three horizontal target lines (61 green, 90 blue, 120 red) provide a visual framework for potential resistance/support levels and upside/downside scenarios.
Appendix: Earnings Summary, EPS Trends, and EPS Revisions (key references)
- Recent Earnings Summary (2025-06-30 quarter)
- Net income: -$546M
- Diluted EPS: -$1.51
- EBITDA: -$153M
- Operating income: $141M
- Gross profit: $2.456B
- Total revenue: $3.411B
- Notable items: Total Unusual Items of -$531M; Tax provision around $95M
- EPS Trend (latest reporting trend)
- 0q: 0.16737
- +1q: 0.80784
- 0y: 2.0933
- +1y: 2.85796
- EPS Revisions (selected highlights)
- 0q: upLast7days = 2; upLast30days = 2; downLast30days = 14; downLast7Days = 14
- +1q: upLast7days = 4; upLast30days = 3; downLast30days = 13; downLast7Days = 12
- 0y: upLast7days = 0; upLast30days = 4; downLast30days = 18; downLast7Days = 1
- +1y: upLast7days = 0; upLast30days = 3; downLast30days = 10; downLast7Days = 1
Key Tables (selected data)
- Key Metrics (summary)
- Current price: 86.20
- Market cap: 31.23B
- Forward P/E: 31.93
- Price to book: 8.02
- ROE: -24.69%
- ROA: 3.40%
- Gross margin: 73.96%
- Operating margin: 4.43%
- Debt to equity: 244.94
- Total cash: 2.92B
- Total debt: 9.47B
- Dividend yield: 1.62%
- Beta: 1.146
- Analyst Targets
- Target Low: 61.00
- Target Mean: 92.34783
- Target Median: 90.00
- Target High: 120.00
- Current price: 86.20
- Analysts: 23
Notes and disclosures
- The price target analysis reflects consensus analyst targets but should be considered within the context of earnings volatility, leverage risk, and potential non-recurring charges observed in the latest quarter.
- The horizontal trendlines are intended to provide reference levels on the price chart for: Low (61), Median (90), High (120). They are extended 30 days into the future from today and are color-coded for easy visual distinction (green for low, blue for median, red for high).
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