COTY - Estée Lauder slips again as Barclays calls out underinvestment in tech after hack
2023-07-20 11:38:24 ET
The Estée Lauder Companies ( NYSE: EL ) can’t catch a break.
In the latest hit to the company, Barclays downgraded shares to Equal Weight from Overweight and dropped its price target to $193 from $210. The average Wall Street analyst price target is $233.
Shares are down 3.1% on Thursday morning.
The bank had already written about concerns over operational challenges at EL after years of under-investment in capital expenditures, including technology. And then on Wednesday the beauty products seller disclosed that it was hacked, which “caused and is expected to continue to cause disruption to parts of the company's business operations.”
“BARC can't help but worry that these issues are broader & more systematic than it originally described,” Barclays said, adding that EL should make additional investments to get the company on firmer footing.
Earlier this month, Citi issued a warning on the near-term share price path for the cosmetics maker on concerns ahead of the earnings report due out in August.
"We expect below consensus initial FY'24 guidance. While that is somewhat anticipated by the market, we don’t believe investors will view low guidance as conservative given large cuts over the last two years,” Citi said.
On Tuesday, Goldman Sachs said China beauty sales are falling short and lowered its FY24 and FY25 estimates meaningfully. Recovery is only expected in the latter half of 2024.
EL is down 27% year-to-date. Peers Coty ( COTY ) is up 37% this year, while e.l.f. Beauty ( ELF ) is up 106%.
More on EL:
- Estee Lauder shares fall after Goldman says China sales falling short
- Estée Lauder hacked; company expects continued disruption
- Confidence in Estée Lauder fades ahead of earnings
- Estee Lauder stock rises as company teases anti-aging research
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Estée Lauder slips again as Barclays calls out underinvestment in tech after hack