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Estee Lauder cut at Oppenheimer on less favorable risk/reward scenario

Published 06/05/2023, 08:26 AM
©  Reuters Estee Lauder (EL) cut at Oppenheimer on less favorable risk/reward scenario

Oppenheimer analysts downgraded shares of Estee Lauder (NYSE:EL) to Perform from Outperform in a note Monday, removing the firm's prior price target for the stock.

The analysts told investors that the upside case for EL is now less compelling, and they are moving to the sidelines.

"Following the company's report in early May, recent developments on the consumer and beauty fronts, and another leg down in shares, we spent time revisiting our investment views on EL," they wrote. "Based on our work, we now see a less favorable risk/reward scenario."

The firm is also trimming its EL forecasts, moving further below the current consensus estimates. In addition, Oppenheimer is "harder pressed to see shares outperforming from current levels amidst aggressive Street estimates, a still premium valuation vs. history, and risks of a conservative management guide in August."

"In contrast to the past, EL is no longer a beat and raise story, in our view, which suggests increased risk to the company's-premium-multiple," the analysts concluded.

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