Estee Lauder (EL) – Turning the Corner With a Fresh Growth Story
Estee Lauder may finally be entering the early stages of a turnaround. After a few tough years weighed down by sluggish demand in key markets, the company’s “Beauty Reimagined” strategy appears to be gaining traction — and Goldman Sachs just confirmed what many investors have been waiting to hear: the setup looks compelling again.
Trading around $93, shares have climbed roughly 16% year to date, but Goldman now sees room for much more, upgrading the stock to Buy and raising its 12-month price target to $115, implying upside of about 30% from current levels. The upgrade centers on a key “fundamental inflection point,” as management’s consumer-first strategy and faster product innovation pipeline begin to show tangible results.
The company has made major changes to how it operates — speeding up time-to-market for new launches, broadening digital reach, and expanding into growth channels like Amazon, TikTok Shop, and specialty beauty retailers. These newer platforms are becoming crucial demand engines, allowing Estee Lauder to connect with younger, digitally engaged consumers in real time.
International growth could be another catalyst. After a challenging stretch, early trends in mainland China are finally improving, and diversification into other high-growth Asian markets should help stabilize results over the next few quarters.
Perhaps most important, valuation remains appealing. At about 18x EV/EBITDA, the stock trades well below its five-year average multiple near 24x, leaving ample room for multiple expansion as margins recover. Goldman expects Estee Lauder to return to top-line growth as soon as this quarter, with double-digit margin recovery by fiscal 2027 — a setup that could reward patient investors.
After a long period of underperformance, Estee Lauder looks poised to regain its shine — and this time, the comeback might just stick.
