Estee Lauder Likely to Report Strong Q1, UBS Says

MT Newswires Live10-27

Estee Lauder (EL) is expected to deliver a strong fiscal Q1 quarter and outlook as the firm is moving in the right direction, UBS said in a note Sunday. The Q1 results are due Nov. 2.

"We agree that top/bottom line momentum is moving in the right direction and would expect a strong quarter/outlook," the report said.

Still, the note said its top line growth is unlikely to return to a high-single-digit growth prospect.

UBS analysts expect organic sales growth of 4.5%, in line with Visible Alpha consensus, gross margin of 74.3%, compared with consensus of 74%, and EPS of $0.49, $0.03 below consensus.

The note said many hold the view that the firm remains one of the few names with upside to organic sales growth and the potential for positive EPS revisions over the next 12 months.

"That said, with shares having moved higher...and valuation above historical averages on a relative basis, we believe much of this NT upside is reflected in the stock," the report said. UBS kept its neutral rating with a $104 price target.

Price: 108.79, Change: +0.12, Percent Change: +0.11

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