Back to top

Analyst Blog

On Mar 22, 2013, we maintained our Neutral recommendation on Estee Lauder Companies Inc. (EL - Analyst Report) following the appraisal of its second quarter 2013 results.

Why the Reiteration?

Estee Lauder reported second quarter 2013 earnings on Feb 5, 2013 with adjusted earnings of $1.16 increasing 14.9% from the prior-year quarter earnings and also beating the Zacks Consensus Estimate by 14.8%, on the back of strong business in the U.S. and emerging markets.

We are encouraged by the company’s strong brand portfolio and growing prestige beauty segment. Moreover, the company is fast spreading into developing nations of Latin America and Asia, where its flagship brand MAC is gaining massive popularity. The company is putting a lot of emphasis on travel retail and boosts sales through aggressive promotions and store openings.

The High-Touch customer service (customer service with extensive personal contact) of Estee Lauder is also helping it to attract new customers and maintain loyalty of existing ones. Moreover, the company has been growing faster than the industry in the past years and aims to grow at least 1% faster than the global beauty product industry moving into 2014.

Although the company is on track to achieve its cost reduction goal, and increasing its operational efficiency and focusing on high-margin products, the absence of strategic acquisitions and slow recovery of economic conditions concern us.

Other Stocks to Consider

Estee Lauder carries a Zacks Rank #2 (Buy). Other stocks in the Cosmetics segment like Avon Products Inc. (AVP - Analyst Report) and Inter Perfums Inc. (IPAR - Snapshot Report), both carrying a Zacks Rank #1 (Strong Buy) and International Flavors and Fragrances Inc. (IFF - Analyst Report), carrying a Zacks Rank #2 (Buy), are also worth considering.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%