Jefferies Cuts Price Target on Estée Lauder (EL) to $95 Following 4Q and Guidance
Jefferies maintained a Hold rating on Estée Lauder (NYSE: EL), and cut the price target to $95.00 (from $98.00), following the company's 4Q earnings report. EL's +7% FX neut. sales growth came in below Street's +8%. EPS of $0.43 topped $0.40 consensus and the company's implied $0.32-$0.37 guidance. EL's FY17 EPS guide of $3.38-$3.44 is -3% below Street.
Analyst Kevin Grundy commented, "We are lowering our FY17-18 EPS est. ~4% post EL's 4Q and below consensus FY17 guide. EL's 6-7% org sales guidance is among the best in the group; however, the co.'s enhanced cost-cutting focus - while sensible - is likely to drive rather pedestrian OM% improvement given a higher cost of growth levered to shifting channel, product, and competitive dynamics. Valuation looks full at 14.5x EV/EBITDA. Hold, PT to $95."
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Shares of Estee Lauder closed at $91.73 yesterday.