Estée Lauder Companies (EL) is a global leader in prestige beauty, offering luxury skin care, makeup, fragrance and hair care through more than 20 iconic brands including Estée Lauder, Clinique, La Mer, MAC and more. The company markets its products through department stores, specialty retailers, travel retailers, e-commerce and showrooms, focusing on high-end products with scientific innovation. Known for anti-aging serums, clean beauty lines and personalized regimens, it combines heritage craftsmanship with cutting-edge research and development.

Founded in 1946 by Estée and Joseph Lauder, the company is headquartered in New York, New York and operates in more than 150 countries in North America, South America, the Middle East, Europe and Asia-Pacific.

EL shares have been volatile lately, falling 12% over the past five days and 10% over the past month. Shares have recovered 14% over the past three months and 13% in six months, but the stock is still down 2% year-to-date (YTD). Over the past 52 weeks, EL shares are up 49%, trading 15% off their high of $121.64.

Compared to the S&P 500 Consumer Staples Index ($SRCS), Estée Lauder has been a short-term laggard, where its negative returns have outpaced the index’s 1.3% five-day return and 10% one-month gain. Over the past 52 weeks, however, Estée Lauder comfortably outperformed the index’s 9% returns, boosted by the recovery from the lows.

Estée Lauder reported strong fiscal second-quarter 2026 results, released on February 5, where revenue rose roughly 6% year-over-year (YOY) to $4.23 billion, right in line with Wall Street forecasts. Net income came in at $162 million, or $0.44 per share, while adjusted EPS was $0.89, beating analysts’ estimates of $0.84 by 6%.

Gross margin improved slightly to 76.5% from 76.1%. Adjusted operating income increased to $608 million (14.4% margin, up 290 basis points), reflecting cost controls. First-half operating cash flow rose to $785 million from $387 million, driven by lower investment. Organic sales grew 4%, a positive turnaround after declines.

Estée Lauder raised its guidance for fiscal 2026 after a strong first-half performance, although it remains cautious amid macroeconomic headwinds and business challenges. Net sales growth is now forecast at 3% to 5% year over year, down from the previous range of 2% to 5%. Adjusted organic net sales are expected to increase 1% to 3%, from 0% to 3%. Adjusted EPS guidance improved to $2.05 to $2.25, reflecting growth of 36% to 49%.

Citi Research upgraded shares of EL to a “Buy” rating from a “Neutral” rating, calling the 24% post-Q2 selloff an attractive entry point. Analyst Filippo Falorni highlighted the company’s improved outlook based on its “Beauty Reimagined” strategy and the upturn in business in China.

Second-quarter profit beat estimates, but 5% revenue growth missed forecasts, while full-year guidance disappointed investors who had expected a big increase. Falorni sees the weakness in travel retail in Asia as temporary. Estée Lauder rebounded after the pandemic (travel retail fell from 33% to 15% of sales) by launching into Amazon ( AMZN ) and TikTok Shop with faster innovation.

Wall Street is generally quite bullish on EL stock. Amid the recent selloff, the stock has been rated at an attractive entry point, which can be further seen with analysts’ “Moderate Buy” consensus rating. The average target price of $108 reflects a potential upside of 4% from the current market rate.

EL shares have been rated by 24 analysts with coverage. The stock currently has nine ‘Strong Buy’ ratings, one ‘Moderate Buy’ rating, 13 ‘Hold’ ratings and one ‘Strong Sell’ rating.

As of the date of publication, Ruchi Gupta had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com