Yahoo Finance The Estée Lauder Companies Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
The Estée Lauder Companies Inc. (NYSE:EL) shareholders are probably feeling a little disappointed, since its shares fell 6.9% to US$135 in the week after its latest quarterly results. Revenues were US$3.9b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.91, an impressive 80% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Estée Lauder Companies after the latest results.
Check out our latest analysis for Estée Lauder Companies
Following the latest results, Estée Lauder Companies' 25 analysts are now forecasting revenues of US$16.9b in 2025. This would be a notable 9.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 130% to US$4.12. In the lead-up to this report, the analysts had been modelling revenues of US$17.1b and earnings per share (EPS) of US$4.29 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The consensus price target held steady at US$156, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Estée Lauder Companies at US$210 per share, while the most bearish prices it at US$130. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Estée Lauder Companies' rate of growth is expected to accelerate meaningfully, with the forecast 7.8% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Estée Lauder Companies is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$156, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Estée Lauder Companies going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Estée Lauder Companies (of which 1 doesn't sit too well with us!) you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
