Investment community gives Estée Lauder the thumbs up
In particular Citi Investment Research, part of Citigroup, one of the world’s largest banks, upgraded its expectations for the company by raising both its rating and its price target for the company’s shares.
Wendy Nicholson of Citi Investment Research stated in an investor note that current 2014 earnings forecasts for Estée Lauder may even be on the conservative side.
Positive appraisals send share prices up
The positive appraisal also seemed to have impacted share prices, which have had an noticeable uptick on the first day of trading this week, up 2.83 percent to close at $69.49.
Although Estée Lauder has continued to post a strong performance over the last couple of years, some investors have ignored the company, pointing to the fact that it has lagged major averages and the kudos of peers such as L’Oreal.
However, with the company’s growth projections now starting to outpace much of the major competition, it is starting look like an increasingly good prospect.
Fourth quarter adds to momentum
Last month the company’s gained even more momentum after it revealed that net sales increased by 7 percent to $2.41bn.
But the biggest gains were seen in its net earnings for the quarter, which were up by 84 percent to $95.9m, a result of the comprehensive restructuring program that has put the company on a stronger financial track.
The quarterly profits beat Wall Street expectations, despite the fact that the figure for the net revenue during the period was slightly below forecasts.
Company impresses the experts
“I am very impressed with how Estée Lauder keeps growing–one innovation at a time. Enough innovations, and the now $10 billion company will soon be much bigger,” said Walter Loeb, a retail analyst for Forbes.com.
Loeb wrote that the company’s focus on key overseas markets, including Germany and France in Europe, and the fast expanding China market, has proven an integral part of its business strategy to expand globally.
Last month the company announced yearly revenues of $10.2bn, the first time ever that revenues have exceeded the $10bn mark and a figure that makes it the fourth largest beauty company in the world.
