Bank of America downgraded the retail stock to "equal weight"
The shares of Estee Lauder Companies Inc (NYSE:EL) are 0.7% lower at $94.51 at last look, after a bear note from BofA Global Securities. The Wall Street analyst downgrade EL to "neutral" from "buy" and lowered its price target by $40 to $100, citing headwinds in China and softening demand in the U.S.
This pessimistic note precedes Estee Lauder's fiscal fourth-quarter earnings call, due out before the open on Monday, Aug. 19. Per Zacks, Wall Street anticipates the cosmetics giant to report a year-over-year rise in earnings and revenue, expecting earnings of 27 cents per share and $3.827 billion in revenue.
Looking over the last two years, Estee Lauder stock tends to make outsized moves after earnings, though the reactions are mostly negative. In fact, the equity rose after just two of its last eight post-earnings sessions. The stock has averaged a 9.9% post-earnings move over the past two years, regardless of direction, and the options pits are anticipating an 11.9% move this time around.
Over the last 12 months, Estee Lauder stock is down 41.8%, and sports a 35.5% deficit in 2024. The 20-day moving average guided shares lower since late-April, though EL is bouncing back above its 10-day trendline as it heads for a weekly win.