Jefferies Lowers Price Target on Estee Lauder (EL), Sees Operatign Margin in the 20% Range Looking Ahead
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Price: $86.10 -1.4%
Rating Summary:
20 Buy, 16 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
20 Buy, 16 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reaffirming its Buy rating on shares of Estee Lauder (NYSE: EL) as the company's long term margin story in intact, but is reducing its price target from $120 to $107.
The firm continues to expect strong first half results and currently estimates second quarter earning of $4.20 per share, down from its previous estimate of $4.35. The company released its full-year 2012 guidance below what the Street and firm was forecasting, the firm highlights that the company has been beating its own guidance lately.
Recent talks with management entails that they were factoring in major volatility in the high end luxury market, something that has been the talk of the town most recently.
Jefferies is still forecasting a 7 percent gain in local currency sales for the year following recent momentum in the company's Skin Care segment, which has grown double digits in eight of the last nine quarters.
Estee Lauderis on track to exceed its 14.5-15 percent operating margin target by 2014 as its has already hit its 2013 target of 12.5-13.5 this year. The company's current gross margin is roughly 80 percent and Jefferies believes that this may result in a operating margin in the 20 percent range.
Jefferies is lowering its 2012 and 2013 EPS estimates from $4.35 and $4.95 to $4.20 and $4.80. The firm is also raising its revenue estimates for the two years from $9.379 billion and $9.991 billion to $9.464 billion and $10.081 billion.
For more ratings news on Estee Lauder click here and for the rating history of Estee Lauder click here.
Shares of Estee Lauder closed at $91.50 yesterday.
The firm continues to expect strong first half results and currently estimates second quarter earning of $4.20 per share, down from its previous estimate of $4.35. The company released its full-year 2012 guidance below what the Street and firm was forecasting, the firm highlights that the company has been beating its own guidance lately.
Recent talks with management entails that they were factoring in major volatility in the high end luxury market, something that has been the talk of the town most recently.
Jefferies is still forecasting a 7 percent gain in local currency sales for the year following recent momentum in the company's Skin Care segment, which has grown double digits in eight of the last nine quarters.
Estee Lauderis on track to exceed its 14.5-15 percent operating margin target by 2014 as its has already hit its 2013 target of 12.5-13.5 this year. The company's current gross margin is roughly 80 percent and Jefferies believes that this may result in a operating margin in the 20 percent range.
Jefferies is lowering its 2012 and 2013 EPS estimates from $4.35 and $4.95 to $4.20 and $4.80. The firm is also raising its revenue estimates for the two years from $9.379 billion and $9.991 billion to $9.464 billion and $10.081 billion.
For more ratings news on Estee Lauder click here and for the rating history of Estee Lauder click here.
Shares of Estee Lauder closed at $91.50 yesterday.
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