Goldman Sachs reinstated coverage of The Estée Lauder Companies with a Buy rating and a $100 price target, arguing the beauty giant's turnaround is gaining traction and that investors are underestimating the durability of its sales and earnings recovery. The brokerage highlighted significant changes since 2025, including a new leadership team, a revamped Beauty Reimagined strategy, and a streamlined One ELC operating model, which have returned the company to revenue growth in fiscal 2026 after three consecutive years of declines while driving more than 300 basis points of operating margin expansion year-to-date. Goldman forecasts revenue growth of 4.5% in fiscal 2026 and fiscal 2027, with earnings per share rising to $2.44 in fiscal 2026 from $1.51 a year earlier, and expects EBITDA and EPS to grow at compound annual rates of 18% and 40%, respectively, between calendar years 2025 and 2027. The firm also pointed to improving conditions in China, which accounted for 19% of fiscal 2025 sales, where Estee Lauder has gained market share in seven of the last eight quarters, and noted that travel retail exposure has fallen to 15% of sales from a peak of 29% in fiscal 2021, reducing earnings volatility. On profitability, expanded cost-cutting measures under the Profit Recovery and Growth Plan are expected to support roughly 450 basis points of EBIT margin expansion through fiscal 2029, with management increasing targeted annual savings to $1.0 billion to $1.2 billion and widening planned workforce reductions to as many as 10,000 positions.
Estee Lauder Companies IncGoldman Sachs reinstates coverage with Buy rating and $100 price target, citing turnaround traction and underestimated recovery.