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Estee Lauder Seen Continuing Recovery Amid Volatile Environment, RBC Says

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Estee Lauder (EL) is set to continue its recovery even amid a volatile macro environment, RBC Capital Markets said in a Monday note.

The company, which is slated to report fiscal Q4 financial results on Wednesday, is expected to deliver results within the guidance range and issue fiscal 2027 guidance in line with its preliminary outlook, RBC analysts said.

Estee Lauder's assumptions for its preliminary 2027 expectations, which included reported and organic net sales growth of 3% to 5% and adjusted operating margin of 12.5% to 13.0%, are still mostly intact except for the extended US-Iran conflict and some additional margin pressure on the consumer, the analysts said. They added that the company could see a one-time margin bump, but they expect it to be reinvested back into the business to boost revenue.

Data from market research firms Circana and Numerator show that Estee Lauder is doing well in the categories where it competes in, with the brands that have the most investment driving the growth, according to the note. Recent performance from the beauty, luxury, and retails sectors are mixed, but lean slightly positive for the company, the analysts said.

RBC maintained the company's stock rating at outperform and price target at $111.

Price: $85.33, Change: $-0.77, Percent Change: -0.89%

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