Jefferies Boosts Price Target & Estimates on Estee Lauder (EL) Following Strong Q1 Growth

Jefferies is reiterating its Buy rating on shares of Estee Lauder (NYSE: EL) while raising its price target from $107 to $135.

Following strong Q1 results, the firm is raising its fiscal 2012 EPS estimate from $4.20 to $4.50 and its sales growth forecast from 7.4 percent to a 10 percent gain. Jefferies new estimates are due to a more optimistic local currency and modeling the best growth in Skin Care, Makeup, Hair Care, and Fragrance.

Jefferies is also now forecasting a 20 percent growth in operating income for 2012 on an operating margin of 14.2 percent. The firm notes that since operating margins rose 300 bps in Q1, it only needs to increase anther 50 bps for the balance of the year to meet its forecast.

An analyst at Jefferies comments, "We are sharply raising our estimates and price target on Estee Lauder following strong F1Q results that saw broad-based top line strength across geographies and product categories. Gross margin expansion looks to be delivering on plan, while we believe management's full year operating margin view could prove conservative given the strong F1Q performance."

For 2013, the firm is increasing its EPS and sales estimates from $4.80 and $10.08 billion to $5.33 and $10.5 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 $118.92 yesterday.

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