On Tuesday, Estee Lauder (NYSE:EL) shares experienced a decline of over 2%. Despite this, Evercore ISI maintained an Outperform rating on the company with a $130 price target. The firm's stance comes after observing China's cosmetic import trends, which serve as an indicator for retailer reorders of prestige beauty products in both Mainland China and Hainan.
The report noted that China's imports of cosmetics saw a high-single-digit contraction in August. This trend aligns with the company's first-quarter fiscal year 2025 projections, which anticipate a mid-single-digit decline, mirroring the performance seen in the June quarter. The continued market weakness in China is in line with the guidance provided by Estee Lauder and the consensus among market watchers.
Estee Lauder's Chief Financial Officer (CFO) Travis, last week, reiterated the company's financial outlook, which reflects the current market conditions in China. The CFO's comments support the analysis that the downturn in China's imports is consistent with the expected financial performance of the company.
The maintained Outperform rating suggests that Evercore ISI sees potential in Estee Lauder's stock despite the current challenges in the Chinese market. The $130.00 price target indicates the firm's confidence in the company's value and prospects for recovery.
Investors and market observers will continue to monitor Estee Lauder's performance, particularly in the Chinese market, which is a significant factor in the company's global sales and growth strategy.
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