NEW YORK (TheStreet) -- Shares of Estee Lauder (EL) were dropping on heavy trading volume late Thursday afternoon as CLSA cut its rating on the stock two notches to "underperform" from "buy," the Fly reports.
The downgrade comes after the New York-based make-up company reported revenue that missed analysts' expectations for the 2017 fiscal first quarter yesterday. The company also gave a downbeat forecast.
CLSA said Estee Lauder's first-quarter organic revenue growth of 2% was lower than its estimate for an increase of 3%, the Fly noted.
The company also faces accelerated headwinds from channel mix, categories and brand fragmentation, according to the firm. CLSA sees slower growth offsetting gains from Estee Lauder's cost savings program.
More than 2.67 million of the company's shares changed hands so far today vs. its average 30-day volume of 1.61 million shares.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
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, notable return on equity, increase in stock price during the past year and expanding profit margins.
The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: EL