China's Acclerating eCommerce Penetration Benefits Estee Lauder (EL), Morgan Stanley Reiterates Overweight

Morgan Stanley analyst Dara Mohsenian reiterated an Overweight rating and $312.00 price target on Estee Lauder (NYSE: EL) after eMarketer, an industry consulting firm, published its forecast for China's e-commerce penetration and estimates that online sales will account for 52.1% of China's retail sales in 2021. This is above the 44.8% in 2020 and 34.1% in 2019 and dovetails with EL's high e-commerce share in the beauty segment.

The analyst stated "This bodes well for OW rated Estée Lauder, as China remains an important growth market for Estée at ~18% of revenue in FY20 post-COVID (or ~24% in total including travel retail sales within China or an estimated ~30% including global travel retail by Chinese consumers), with the majority of sales skewed to the high growth online channel. EL's China e-commerce sales have accelerated recently and grown +DD%, driven by strong online growth with the Double 11 (Singles Day) shopping festival, and accounted for more than 50% of China sales as of F2Q21 (perhaps inflated a bit by Singles Day sales), above ~43% in FY20 and ~30% in FY19".

For an analyst ratings summary and ratings history on Estee Lauder click here. For more ratings news on Estee Lauder click here.

Shares of Estee Lauder closed at $295.74 yesterday.

You May Also Be Interested In

• Jefferies cuts China online beauty outlook after July slowdown
• Bernstein on China Online Beauty: Very Weak July Performance
• Deutsche Bank Downgrades SentinelOne Inc (S) to Hold on Valuation