Goldman Sachs believes Estée Lauder has successfully turned around its stock and investors should buy more stock. The bank upgraded Beauty’s shares from hold to buy and raised its 12-month price target to $115 per share from $76. Latest forecasts suggest a 31% rise from Friday’s close. Analyst Bonnie Herzog cited the upcoming fundamental changes driven by strategic initiatives put in place by management for the rating change. “We estimate that the business could return to top-line growth as early as the first quarter (September), followed by a return to double-digit EBIT margins from FY27 onwards,” he said. “As we first emphasized after meeting with EL’s CEO and CFO at our headquarters in New York in February 2025, we believe that mgmt is moving in the right direction with our strategic vision of ‘Reimagining Beauty,’ with a focus on delivering trend-aligned innovations faster to become a more agile beauty company through a consumer-first approach. YTD Chart A return to growth in mainland China will also help boost Estée Lauder shares, Herzog noted. The company’s management “highlighted early encouraging trends in mainland China” during its June earnings call, but that could be exacerbated by the company’s efforts to diversify into other emerging markets in Asia over time. Herzog also praised the company’s efforts to expand its presence in fast-growing channels, including specialty beauty retailers and brand launches with Amazon and TikTok shops. “Specifically, MGMT views these platforms as an important part of the new media model. Since consumers primarily search for beauty products on these platforms, these platforms serve the purpose of increasing demand for our brands,” she wrote. Herzog added that the revised price target assumes Estée Lauder is currently trading at a discount. He said the company’s stock price is about 18 times enterprise value to EBTIDA, below the average multiple of about 24 times over the past five years. “Despite a similar revenue base, we believe EL’s revenue is significantly below fiscal year 2019 revenue,” he wrote. Estée Lauder shares rose more than 4%. Year-to-date, the stock is up more than 16%. Despite Goldman’s upgrade, analysts are mostly neutral. According to LSEG data, 22 out of 28 analysts covering Estée Lauder have maintained their forecasts. The remaining six stocks are rated “buy” or “strong buy.” (Learn the best strategies for 2026 from inside the NYSE with Josh Brown and others on CNBC PRO Live. Tickets and information here.)
