NEW YORK (TheStreet) -- Estee Lauder (EL - Get Report) has been downgraded to "market perform" from "outperform," BMO Capital said Monday. The firm said the company is facing difficult comps. A $76 price target was set.
Separately, TheStreet Ratings team rates LAUDER (ESTEE) COS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:"We rate LAUDER (ESTEE) COS INC (EL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EL's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, EL has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for LAUDER (ESTEE) COS INC is currently very high, coming in at 83.95%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.32% is above that of the industry average.
- LAUDER (ESTEE) COS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LAUDER (ESTEE) COS INC increased its bottom line by earning $2.58 versus $2.16 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.58).
- The change in net income from the same quarter one year ago has exceeded that of the Personal Products industry average, but is less than that of the S&P 500. The net income has decreased by 3.4% when compared to the same quarter one year ago, dropping from $447.50 million to $432.50 million.
- You can view the full analysis from the report here: EL Ratings Report