The Estée Lauder Companies Inc. (NYSE:EL) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were US$3.7b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.64, an impressive 48% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Estée Lauder Companies' 27 analysts is for revenues of US$15.8b in 2027. This would reflect a credible 3.7% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 202% to US$3.06. In the lead-up to this report, the analysts had been modelling revenues of US$15.7b and earnings per share (EPS) of US$2.94 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
Check out our latest analysis for Estée Lauder Companies
There's been no major changes to the consensus price target of US$114, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Estée Lauder Companies, with the most bullish analyst valuing it at US$129 and the most bearish at US$70.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Estée Lauder Companies' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.9% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 4.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.4% per year. So while Estée Lauder Companies' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Estée Lauder Companies following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Estée Lauder Companies analysts - going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Estée Lauder Companies , and understanding them should be part of your investment process.
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