JPMorgan Reiterates Overweight Rating on Estee Lauder (EL)
JPMorgan analyst Andrea Teixeira reiterated an Overweight rating and $129.00 price target on Estee Lauder (NYSE: EL).
The analyst comments "EL (OW) reported 4QFY24 adj. EPS of $0.64, well above high end of guidance range of $0.18 to $0.28 and also significantly above JPM/Street forecasts of $0.26/$0.27 heading into the print. We note the EPS beat was mainly driven by lower SG&A ratio ($0.27 vs. JPMe) and more favorable tax impact due to restructuring/other items (+$0.19 vs. JPMe), partially offset by other non-operational items (-$0.07 vs. JPMe) and worse gross margin (-$0.02 vs. JPMe). Total company organic sales growth (OSG) of +7.0%, was closer to the lower end of guidance range of +6% to +10% and below our forecast of +8.3% but roughly met consensus estimate of +7.2% (as per Consensus Metrix or CM). For more context on the beat, SG&A ratio of 62.7% positively surprised (-334 bps vs. JPMe/-364 bps YOY) while gross margin of 71.8% was slightly below our estimate by -19 bps vs. JPMe/+341 bps YOY, leading to an EBIT margin of 9.0% or a beat of +315 bps vs. our forecast."
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Shares of Estee Lauder closed at $94.97 yesterday.