On Tuesday, Citi reiterated its Buy rating and $110.00 price target for Estee Lauder (NYSE:EL) stock ahead of the company's fourth fiscal quarter results, which are due on August 19, 2024.
The firm's stance comes after reviewing industry data and feedback from Estee Lauder's peers, as well as a survey conducted with investors about their expectations for the company's fiscal year 2025 operating sales growth (OSG) and earnings per share (EPS) guidance.
Citi's survey, which gathered 36 responses between August 7 and August 12, revealed a weighted average FY25 OSG guidance expectation of approximately +0.9%. This figure falls below the Visible Alpha consensus of +6.7% and Citi's estimate of +4.1%. Approximately 42% of the survey respondents anticipate FY25 OSG to be between flat and 3%, and around 28% expect it to be between 3-6%.
In terms of FY25 EPS, the weighted average expectation stands at $3.62, which is below the FactSet consensus of $3.99 but closer to Citi's estimate of $3.58. The survey showed that 36% of respondents expect the FY25 EPS to be between $3.30 and $3.60, while 33% forecast it to be in the range of $3.60 to $3.90.
The survey results indicate a more conservative outlook from investors compared to the consensus estimates. Estee Lauder's upcoming financial results and guidance for FY25 will provide further insights into the company's performance and the accuracy of these predictions.
Estee Lauder has not commented on the survey findings or Citi's reiterated rating and price target. Investors and industry analysts will closely watch the beauty company's stock performance following the release of its F4Q24 results and FY25 guidance.
InvestingPro Insights
As Estee Lauder (NYSE:EL) approaches its fourth fiscal quarter results, a glance at the real-time data from InvestingPro shows a company with a robust gross profit margin of 70.77% over the last twelve months as of Q3 2024. This impressive margin underscores the company's ability to maintain profitability despite challenging market conditions. The company's market capitalization stands at $30.91 billion, reflecting its significant presence in the industry.
InvestingPro Tips highlight that Estee Lauder has not only maintained dividend payments for 29 consecutive years but has also raised its dividend for 3 consecutive years, signaling a commitment to returning value to shareholders. This is particularly noteworthy as the stock is trading near its 52-week low, presenting a potential opportunity for investors considering the company's history of dividend reliability.
While the stock has faced pressures, with a price total return of -47.57% over the last year, Estee Lauder's ability to sustain dividend payments amidst market fluctuations could be a silver lining for investors. For those seeking a deeper dive into the company's prospects, InvestingPro offers even more detailed analysis, with an additional 16 tips available for Estee Lauder.
As Citi maintains its Buy rating and investors anticipate Estee Lauder's upcoming financial disclosures, these InvestingPro insights offer a broader context for understanding the company's market position and financial health.
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