- Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on Estee Lauder Companies Inc (NYSE:EL) with a price target of $377.00.
- The beauty products provider reported Q4 earnings above the Street expectations.
- Herrity said the earnings upside was driven by better sales and expense control, strong growth in the Americas, particularly brick-and-mortar, as customers continued to return to in-store shopping.
- The 10% revenue decline, the analyst thinks, was driven by a high-teens decline in the company’s largest category, skin care, as COVID-related restrictions/lockdowns weighed on the period.
- A temporary reduction in capacity at its Shanghai DC further pressured the quarter.
- Telsey opined that the Q4 decline seems to have entirely offset high-single-digit growth through the first three-quarters of the year, resulting in a flat annual result for the category.
- The conservative outlook provided by Estee is a prudent approach to the year ahead given the number of macro challenges and uncertainties, said the analyst.
- A potential improvement in the travel retail channel and a return of social and work engagements could provide possible upside to the outlook.
- Price Action: EL shares are trading higher by 1.82% at $281.56 on the last check Thursday.
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