Estee Lauder Stock Brushes Off Bright Quarterly Report

Oppenheim raised its price target to $160 from $140

Deputy Editor
May 1, 2020 at 10:36 AM
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The shares of Estee Lauder Companies Inc (NYSE:EL) are down 1.6% to trade at $173.87 this morning, despite a bright fiscal third-quarter report. The makeup manufacturer announced profits of 85 cents per share and revenue of $3.35 billion -- both topping Wall Street's estimates. Though the M.A.C. parent got a boost from global online sales, its net sales still fell 10.7% to $3.35. The firm added that it expects coronavirus-induced store closings to adversely affect its current quarter.

The earnings beat sparked a price target hike from Oppenheimer to $160 from $140, though sentiment surrounding EL is decidedly lukewarm. Ten out of 17 analysts sport a "hold" rating, compared to seven saying "buy" or better. Meanwhile, the 12-month consensus price target of $172.20 is a 1.7% discount to current levels. 

Though EL has seen a steady rise on the charts since its annual low of $137.01 on March 18, the security is once again grappling with its 320-day moving average, while its descending 60-day moving average is also keeping a lid on the shares. The stock did manage a 10.7% pop for April but is still down 14.6% year-to-date. 

Short interest is rolling down from its early March peak, off 41.3% in the last reporting period. The 3.25 million shares sold short now account for just 1.5% of the stock's available float, and would take a little over a day to cover at EL's average pace of trading.

In the options pits, however, bears still rule the roost. In the last 10 days 2.45 puts were picked up for every call at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 81% of readings from the past year, suggesting a much healthier appetite for these pessimistic positions of late. 

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