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

· 02/05/2021 08:14

01:10 PM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our target to $290 from $220, 43.9x our FY 22 (June) EPS estimate of $6.60 (up from $6.51) and a steep premium to historical averages, which we find justified by consistently solid execution and greater EPS growth and operating margin expansion opportunities post-pandemic as EL grows its online platform, further penetrates high-growth markets like China, and expands its margin-accretive and fast-growing skin care lineup. We lift our FY 21 EPS estimate to $6.18 from $5.29. EL posts F2Q (Dec-Q) adj-EPS of $2.61 vs. $2.11 (+24%), smashing the $1.69 consensus. The beat was driven by strong operating margins (highest in at least the past decade) and a lower effective tax rate (from a one-time tax benefit). That said, many of EL's Covid-19 related cost containment measures remained in place during the quarter, and over the next few quarters, we expect expenses to gradually ramp up. EL's FQ3 (Mar-Q) guidance was light, but we note EL has only missed the quarterly EPS estimate once since FY 10.