JPMorgan recommended buying Estee Lauder shares. What are the bank's analysts betting on?

JPMorgan recommended to buy Estee Lauder shares, having upgraded their rating, and raised the target price to $101. This target implies growth of securities by another 16%. The bank expects that the driver of growth of the brand will be high sales during the holidays at the end of the year. Analysts' optimism was reinforced by strong results of June online sale in China, which turned out to be better than market forecasts.

JPMorgan upgraded Estee Lauder from "neutral" to "above market" (equivalent to recommending "buy"), increasing the target price by more than 60%, from $62 to $101, wrote GuruFocus. The new target implies the stock is up 16% relative to its closing price on July 24.

JPMorgan analysts also added Estee Lauder to their Positive Catalyst Watch list (where they add stocks of companies that are expected to see positive events (catalysts) that could push the price up in the near future) ahead of the company's upcoming earnings report on August 20. The decision is based on expectations that Estee Lauder will reach the upper end of its revenue and earnings forecast thanks to the results of the recent online sale in China (shopping festival on June 18), the results of which exceeded analysts' and market expectations, the publication notes.

The company's shares rose nearly 1% in trading on July 25, and are up 17% since the beginning of the year. 

Analysts at JPMorgan express confidence that Estee Lauder will experience a positive turnaround in comparable sales during the year-end holiday season. Analysts believe that these expectations fit well with Estee Lauder's strategy and its ability to grow in the next quarter, GuruFocus writes.

In the third quarter of fiscal 2025 (ended March 31), Estee Lauder increased market share in the U.S., China and Japan, improved gross margin 310 basis points year-over-year to 75%, advanced restructuring, cutting more than 2,600 employees and optimizing middle management by 20%, launched successful new products such as Clinique Moisture Surge face cream and Double Wear concealer, and grew online sales through AI-driven marketing and an expanded presence on Amazon and TikTok.

In the upcoming report, analysts expect to see earnings of $0.07 per share, down 89% from a year ago. That said, the company has beaten Wall Street forecasts for four consecutive quarters, writes Barchart. 

For the full fiscal year 2025, earnings of $1.49 per share are projected (down 42.5% from the prior year), but are expected to rise 43% to $2.13 in 2026. 

Out of 29 analysts tracking Estee Lauder securities, the majority - 21 - have a neutral stance (Hold rating). Six are optimistic (Buy) and two advise to sell (Underweight and Sell). The consensus target price is 13% below the July 24 closing price.

This article was AI-translated and verified by a human editor