UPDATE: Estee Lauder (EL) Sees Bull Scenario Unfolding, PT Raised to $312 at Morgan Stanley

Morgan Stanley analyst Dara Mohsenian raised the price target on Estee Lauder (NYSE: EL) to $312.00 (from $285.00) after the company reported a significant FQ2 topline/profit/EPS beat in a peak seasonal quarter, with a return to topline growth (flat ex Dr.Jart+) even before cycling COVID pressure.

The key value drivers of the analyst's bull thesis, China, e-commerce, travel, retail, and skin care, all performed better than expected. The analyst reiterated the Overweight rating, stating "While upside in the quarter itself was clearly positive in a peak seasonal quarter, we'd argue the composition of results continues to be even more impressive, with the key long-term value drivers behind our bull thesis coming in much better than expected on the topline growth front: 1) continued e-commerce strength, with sales +60% yoy and accelerating vs FQ1's +40% pace, 2) skin care was +25% yoy with 1,700 bps of upside vs consensus, 3) China was strong with total global Chinese consumer
sales growth doubling vs FQ1's pace and Asia Pacific +27% yoy, and 4) travel retail, actually grew single digits yoy with a shift to local/regional Asia consumption (Hainan, etc) and EL share gains, a very impressive accomplishment in the middle of a pandemic. We continue to believe in our long-standing call that Estée is transforming to a higher growth and higher margin company as mix
shifts to these value drivers, which is occurring at an even greater pace than expected based on FQ2 results."

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