UBS Reiterates a 'Buy' on Estee Lauder (EL); Beyond The Numbers

UBS reiterates a 'Buy' on Estee Lauder (NYSE: EL) price target raised from $118 to $135.

UBS analyst says, "Still In the Early Innings of the “10 and 10” Thesis - At the beginning of the year, we upgraded EL to Buy on the premise that it will be one of the very few companies that could deliver 10%+ EPS growth per annum over the next 10 years. This quarter’s performance adds to our conviction that EL can continue to outgrow its peers TODAY while setting the stage for outperformance in the FUTURE."

"What Gives Us Confidence in Our 20% EBIT Margin Estimate by 2020 - Core to our bull thesis is that Estee can show annual progression over the next decade to
achieve a 20% EBIT margin. While some may balk at that number, we note that Estee’s incremental EBIT margins (excluding cost savings) have been tracking well above 20% over the past few years. If Estee can grow top line 5-6% and control overhead, we believe operating leverage alone could help achieve higher margins."

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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