Core Viewpoint - Estée Lauder is considering selling three brands: Dr.Jart+, Too Faced, and Smashbox, with a potential valuation significantly lower than their original acquisition prices [2] Group 1: Brand Valuation and Sale - The estimated sale price for the three brands is in the "low nine figures," approximately between $300 million to $500 million [2] - Estée Lauder acquired Smashbox for $2-3 billion in 2010, Too Faced for about $1.45 billion in 2016, and Dr.Jart+ for over $1.1 billion, totaling over $2.5 billion for all three brands [2] Group 2: Strategic Changes and Brand Performance - Since the new CEO took office in January 2025, Estée Lauder has initiated significant changes, including a new growth strategy called "Beauty Reimagined," focusing on a streamlined organizational structure and reallocating resources to brands with higher growth potential [2] - The brands in question have seen a decline in performance and competitiveness over time, leading to their consideration for sale [2][3]

Core Viewpoint - Estee Lauder has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Estee Lauder suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [9][10]. Recent Performance of Estee Lauder - For the fiscal year ending June 2026, Estee Lauder is expected to earn $2.16 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 5.5% over the past three months [8].

Core Insights - Estee Lauder Companies Inc. has identified fragrance as a significant driver of organic sales growth, achieving a 13% organic net sales increase in the first quarter of fiscal 2026, contributing to an overall organic sales growth of 3% for the quarter [1][8] Fragrance Performance - The luxury segment is the primary driver of Estee Lauder's fragrance portfolio, with brands like Le Labo and Tom Ford experiencing strong consumer demand, particularly in Mainland China [2] - New product launches and extensions from brands such as Jo Malone London and KILIAN PARIS have also bolstered category performance [2] Distribution and Innovation - To enhance fragrance growth, Estee Lauder has expanded its distribution and innovation capabilities, opening 14 new freestanding fragrance stores in key markets and launching a Fragrance Atelier in Paris to develop next-generation luxury fragrances [3] Future Outlook - Management anticipates that fragrance will continue to be a faster-growing category within prestige beauty for fiscal 2026, providing a stable growth source amid mixed broader category trends [4] Competitive Landscape - Coty Inc. positions fragrance as its core growth engine, highlighting strong demand for prestige scents and new launches, with the U.S. prestige fragrance market growing in mid-single digits [5] - e.l.f. Beauty, Inc. treats fragrance as a complementary category, focusing primarily on growth in color cosmetics while selectively expanding into fragrance [6] Financial Performance - Estee Lauder's shares have increased by 9.3% over the past month, outperforming the industry growth of 8.5% [7] - The company trades at a forward price-to-earnings ratio of 44.19X, higher than the industry average of 30.07X [9] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 43.1% for fiscal 2026 and 35.9% for fiscal 2027 [10]

Group 1 - Dollar General Corporation (DG) has seen a 5.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and has a dividend yield of 1.7%, compared to the industry average of 0.9% [1] - LATAM Airlines Group S.A. (LTM) has experienced a 4.2% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days and has a dividend yield of 1.6%, compared to the industry average of 0.0% [2] - The Estée Lauder Companies Inc. (EL) has seen a 1.4% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Group 1: Luxury Goods Industry - The luxury goods sector is undergoing significant adjustments with management changes, capital maneuvers, and strategic optimizations as core themes, reshaping the industry landscape [1] - Givenchy and Dior have initiated management changes to enhance brand competitiveness, while Alo has hired a former Dior executive to accelerate its high-end lifestyle transformation [1][2] - LVMH continues its management reshuffle, appointing Amandine Ohayon as CEO of Givenchy and promoting Alessandro Valenti to a key role at Dior, reflecting a strategy focused on internal talent development [6][8][9] Group 2: Sportswear Industry - Anta Sports has made a bid to acquire a 29% stake in Puma, which would make it the largest single shareholder, amidst Puma's declining sales and restructuring efforts [4][5] - Puma has appointed Nadia Kokni as Global Brand Marketing Vice President to lead its marketing strategy during a critical phase of brand restructuring [10] Group 3: Beauty Industry - Estée Lauder is considering selling three brands for $300-500 million, significantly less than the $2.5 billion spent on their acquisition, as part of a strategy to focus on high-end beauty [11][12] - L'Oréal plans to launch over 20 new products in 2026, leveraging multi-channel strategies to capture market growth, following strong performance in recent years [17][18] Group 4: Market Trends - The beauty industry is shifting from incremental to stock market pressures, with high-end positioning becoming increasingly important [1] - The trend of local business autonomy is highlighted by the Shanghai New World New Maru Center ending its partnership with Japanese firms to operate independently, showcasing resilience in local commerce [1][16] Group 5: Company-Specific Developments - Alo has launched a high-end custom series and plans to expand its international presence, including a flagship store on the Champs-Élysées by 2026 [3] - The family behind the Chinese beauty brand Mao Geping plans to sell shares worth up to 1.41 billion HKD, raising concerns about the impact on the company's future despite its current growth [14][15]

Core Viewpoint - The Estée Lauder Companies Inc. is recognized as a strong investment opportunity, particularly highlighted by recent upgrades from financial analysts, indicating a positive outlook for the company's future performance [2][3]. Analyst Upgrades - Wells Fargo raised its price target for Estée Lauder from $95 to $111 while maintaining an Equal Weight rating, reflecting updated models across various sectors [2]. - Raymond James upgraded Estée Lauder to Strong Buy from Market Perform, setting a new price target of $130 and including the stock in its Analyst Current Favorites list, citing a transition from narrative to execution in the company's turnaround strategy [3]. Company Strategy - The CEO outlined a strategy focused on expanding market share and increasing sales through the development of new brands, targeting younger consumers globally, and customizing products to fit local cultural preferences [4]. - The company aims to leverage the rising global middle class as a significant growth driver through 2030, which is central to its long-term plans [4]. Market Focus - Estée Lauder is in the midst of a turnaround, aiming to rebalance growth by increasing focus on the Americas and emerging markets, while still maintaining a presence in China despite recent consumer spending pullbacks [5].

Core Viewpoint - Estée Lauder is reportedly considering selling its brands Too Faced, Smashbox, and Dr.Jart+ (collectively referred to as "Tijia Ting") at a significantly reduced price, reflecting a strategic shift towards streamlining its brand portfolio amid ongoing sales declines [1][2][3]. Group 1: Brand Sale Details - The three brands are being pitched to potential buyers with an expected total sale price in the low nine figures, estimated between $300 million to $500 million (approximately 2.09 billion to 3.49 billion RMB) [3]. - Estée Lauder originally acquired these brands for over $2.5 billion (approximately 17.46 billion RMB), indicating a potential loss of around 80% if sold at the current estimated price [3]. - Dr.Jart+ has been under Estée Lauder for only six years, highlighting the rapid decline in brand value [3]. Group 2: Strategic Context - The sale aligns with Estée Lauder's broader strategy under CEO Stéphan de La Faverie, which emphasizes a streamlined brand portfolio and investment in higher-growth potential brands [6][10]. - The brands targeted for sale are positioned in the mid-market segment, which contrasts with Estée Lauder's current focus on high-growth luxury beauty brands that contribute over 70% of its revenue [7][12]. - The cosmetic market has seen a decline in demand for color cosmetics, with Estée Lauder's makeup segment experiencing a 1% drop in Q1 of fiscal year 2026, while fragrance sales surged by 13% to $721 million (approximately 5.13 billion RMB) [8][12]. Group 3: Industry Trends - The trend of major beauty companies divesting underperforming brands is becoming common, as seen with Coty and Kenvue also evaluating their brand portfolios [15][18]. - This shift indicates a broader industry move from expansion to prioritizing profitability and focusing on core brands, reflecting the changing dynamics in the beauty market [18].

Core Insights - Estee Lauder is positioned well to continue its trend of beating earnings estimates in upcoming reports [1] Earnings Performance - Estee Lauder has a strong history of surpassing earnings estimates, averaging a 56.25% beat over the last two quarters [2] - In the most recent quarter, the company reported earnings of $0.32 per share, exceeding the expected $0.16 per share by 100.00% [3] - For the previous quarter, Estee Lauder reported $0.09 per share against an estimate of $0.08 per share, resulting in a surprise of 12.50% [3] Earnings Estimates and Predictions - Recent estimates for Estee Lauder have been increasing, with a positive Zacks Earnings ESP indicating potential for another earnings beat [6] - The Zacks Earnings ESP for Estee Lauder is currently +3.82%, suggesting analysts are optimistic about its near-term earnings potential [9] - The company's Zacks Rank is 2 (Buy), further supporting the likelihood of an earnings beat [9] Earnings ESP Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7] - The Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [8]

Company Overview - The Estée Lauder Companies Inc. has a market cap of $38.5 billion and is a global leader in prestige beauty, with a diversified portfolio that includes skincare, makeup, fragrance, and haircare [1] - Founded in 1946 and headquartered in New York City, the company manages iconic brands such as Estée Lauder, MAC, Clinique, La Mer, Bobbi Brown, and Jo Malone London, sold through various channels worldwide [1] Earnings Expectations - Analysts anticipate that Estée Lauder will report a profit of $0.82 per share for the upcoming second quarter, representing a 32.3% increase from the previous year's $0.62 [2] - For fiscal 2026, the expected profit is projected to be $2.15 per share, a 42.4% increase from $1.51 in fiscal 2025, with further growth expected to $2.93 in FY2027, a 36.3% year-over-year rise [3] Stock Performance - Over the past 52 weeks, EL stock has surged by 47.6%, significantly outperforming the S&P 500 Index's 16.2% increase and the Consumer Staples Select Sector SPDR Fund's marginal decline [4] - Following an upgrade by Raymond James Financial, EL shares rose more than 3%, reflecting increased confidence in the company's earnings recovery and operational improvements [5] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for EL stock, with 24 analysts covering it: seven recommend "Strong Buy," one "Moderate Buy," 15 suggest "Hold," and one rates it as "Strong Sell" [6] - The stock is currently trading above its mean price target of $103.23 [6]

Core Insights - Estee Lauder Companies Inc. reported a 3% organic net sales growth in Q1 fiscal 2026, but performance varied significantly by region, raising concerns about the ability of North America to offset ongoing weaknesses in Asia [1][9] North America Performance - North America experienced a low-single-digit organic sales decline due to pressures from department store closures, a major retailer's bankruptcy, and high inventory levels, which outweighed the benefits from increased shipments to Amazon Premium Beauty stores [2][9] - The organic sales decline in the Americas segment improved to 2% in Q1 fiscal 2026, compared to a 4% decline in Q4 fiscal 2025, indicating potential stabilization in the region [3] Asia Performance - Asia/Pacific reported high-single-digit organic growth, primarily driven by global travel retail and favorable comparisons to a weak prior-year base, although underlying demand challenges persist [4][9] - Mainland China returned to growth, supported by online sales and targeted promotions, but overall consumer sentiment remains subdued [4] - Management noted that foot traffic in travel retail is recovering in select locations, but conversion rates are still below normal levels [4] Industry Comparison - Coty Inc. reported a 6% year-over-year decline in net revenues in the Americas, reflecting similar regional headwinds faced by Estee Lauder [6] - e.l.f. Beauty, Inc. saw a significant 18% year-over-year growth in U.S. net sales, highlighting a divergence in performance between U.S. and international markets [7] Valuation and Estimates - Estee Lauder shares have increased by 5.2% over the past month, outperforming the industry growth of 2.5% [8] - The company trades at a forward price-to-earnings ratio of 42.35X, significantly higher than the industry average of 28.48X [10] - The Zacks Consensus Estimate for Estee Lauder's fiscal 2026 EPS is $2.15, with a slight increase in estimates for fiscal 2027 to $2.93 [11]