Well before market open on Monday, Estée Lauder Companies (NYSE: EL) stock received a boost without the company even trying. An analyst upgraded his recommendation on the storied cosmetics company, and investors greeted the news by boosting its share price by nearly 5%. This was more than quintuple the percentage rate gain of the S&P 500 index on the day.
Leaping from neutral to buy
The analyst doing the upgrading was Steve Powers from veteran international lender Deutsche Bank. Powers has had a change of view on Estée Lauder, as he modified his recommendation to buy from his previous hold. His price target is $95 per share, quite a change from his preceding $71 level.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Image source: Getty Images.
The pundit’s new outlook on the company hinges on its international growth strategy. According to reports, Powers believes that there is mounting evidence that management’s goal of boosting overseas sales in markets besides China is working.
Meanwhile, the analyst gave Estée Lauder good marks for innovating its product lineup and wrote that its considerable investment requirements — mainly in areas such as supply chain management — have already been made, carving out a path for robust profitability growth.
The challenge of being an incumbent
It isn’t easy to lift either sales or profitability if you’re a well-established company in your field, and Estée Lauder has been struggling with this for some time. Yet I’d agree with Powers that its current management team seems to be sensible and engaged, and pulling the right levers for growth. This isn’t a stock that excites me all that much, but perhaps something of a growth spurt is happening.
Should you invest $1,000 in Estée Lauder Companies right now?
Before you buy stock in Estée Lauder Companies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Estée Lauder Companies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $664,089!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $881,731!*
Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 23, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
