Goldman Upgrades Estee Lauder, Sees Growth Returning As China, Travel Retail Stabilize

Author: Priya Nigam | October 13, 2025 03:29pm

Global beauty giants are redefining growth strategies in a rapidly evolving market, reshaping consumer experiences and setting new industry benchmarks. Estee Lauder Companies Inc. (NYSE:EL) could begin generating topline growth as soon as the fiscal first quarter starting in September, "which should be followed by a return to double-digit EBIT margins in FY27 and beyond," according to Goldman Sachs.

The Estee Lauder Companies Analyst: Analyst Bonnie Herzog upgraded the rating to Buy, while raising the price target to $115.

The Estee Lauder Companies Thesis: The management seems to be taking the proper steps with their “Beauty Reimagined” strategic vision, Herzog said in the upgrade note.

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This includes a consumer-first approach as well as a focus on faster on-trend innovation "to become a more agile beauty company," which has led to the business underperforming over the past few years, she added.

The analyst mentioned five reasons for being "incrementally more optimistic," which are:

• The prestige beauty industry has mid-single-digit long-term growth potential.
• Stabilizing business trends in Estee Lauder's key China market, with mainland China sales returning to mid-single-digit growth in the back half of 2025.
• Abating headwinds within travel retail, with Hainan returning to growth in May.
• A return to market share gains in the U.S. in the back half of 2025, after several years of contraction.
• Strong savings driving a recovery in gross margins, which "should support EBIT margin expansion in FY26 and beyond while fueling continued reinvestments."

EL Price Action: Estee Lauder Cos shares were up 5.81% at $92.74 at the time of publication on Monday. The stock is approaching its 52-week high of $97.44, according to Benzinga Pro data.

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Posted In: EL