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Research Alert: CFRA Maintains Hold Opinion On Shares Of Estee Lauder Companies Inc.

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Following stronger-than-expected FQ3 results, we lower our 12-month target by $10 to $87. This is based on 29x our FY 27 EPS estimate (rolled forward from 45x FY 26), a discount to shares' 39x three-year average forward multiple. We raise our FY 26 EPS estimate to $2.22 from $2.16 and FY 27's to $2.99 from $2.73. EL posted better gross margins (+140 bps) despite tariff costs and improved operating margins (+360 bps). Management also offered a constructive view on FY 27 operating margins, implying a 190 bps improvement at the midpoint. While these results were ahead of consensus, we highlight cost cuts as the primary driver, particularly point-of-sale headcount reductions. At current levels, shares trade at a premium to the overall market, limiting upside unless there is a recovery in EL's China market and legacy brand stabilization. This is offset by robust FQ3 organic growth in the Fragrance segment (+10%) and a higher FY 26 organic growth guide (+3%). We see balanced risk/reward at current valuation levels.

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