Goldman Sachs Upgrades Estee Lauder (EL) to Buy

Goldman Sachs analyst Bonnie Herzog upgraded Estee Lauder (NYSE: EL) from Neutral to Buy with a price target of $115.00 (from $76.00).

The analyst comments: "We are incrementally more optimistic given; (1) The attractiveness of the prestige beauty industry with +MSD long-term category growth potential; (2) Stabilizing business trends in its key China market as EL's mainland China sales returned to +MSD growth (with market share gains) in 2H25 (vs. -MSD declines in FY25); (3) Abating headwinds within travel retail, with Hainan returning to growth in May. Notably, travel retail inventories are now in a better position and mgmt is working on activations to support better conversion to benefit from improving traffic trends in the channel; (4) Improving market share trends in the US (with a return to share gains in 2H25 following several years of declines). EL's US business is benefiting from a more diversified channel mix and EL has scaled its presence on Amazon, where it first launched Clinique in March 2024 and now has 11 brands (as well as leveraging its US playbook to scale its e-com presence internationally); and (5) Strong PRGP/productivity savings, which has driven gross margin recovery (+236bps) in FY25 and should support EBIT margin expansion in FY26 and beyond (we expect ~500bps of EBIT margin expansion through FY28) while fueling continued reinvestments."

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 $87.65 yesterday.

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