Goldman Sachs believes that Estee Lauder has successfully righted the ship, and investors should load up on shares. The bank upgraded the beauty stock to buy from hold and hiked its 12-month price target to $115 per share from $76. The updated forecast suggests upside of 31% from Friday's close. Analyst Bonnie Herzog cited an upcoming fundamental inflection, driven by strategic initiatives management has put in place, for the rating change. "We estimate the business could potentially return to topline growth as soon as FQ1 (Sep), which should be followed by a return to double-digit EBIT margins in FY27 and beyond," she wrote. "As we first highlighted following our meeting with EL's CEO & CFO at their HQ in NYC in Feb 2025, we believe mgmt is taking steps in the right direction with its 'Beauty Reimagined' strategic vision via its consumer-first approach and focus on delivering faster on-trend innovation to become a more agile beauty company, which has been a key issue and driven its underperformance in the past few years." EL YTD mountain EL YTD chart A return to growth in mainland China should also help boost shares of Estee Lauder, Herzog noted. The company's management "highlighted encouraging early trends within mainland China" during its June earnings call, which could be compounded by the company's efforts to diversify to other emerging markets in Asia over time. Herzog also applauded the company's efforts to scale its presence on faster-growth channels including specialty beauty retailers and brand launches with Amazon and the TikTok shop. "Notably, mgmt views these platforms as an important part of its new media model wherein these platforms serve the purpose of amplifying demand for its brands as consumers predominantly search for beauty products across these platforms," she wrote. Herzog added that her revised price target assumes that Estee Lauder is currently trading at a discount. She said the stock trades at about 18 times enterprise value to EBTIDA, below a five-year average multiple of roughly 24. "We believe EL is meaningfully under-earning relative to what the company earned in FY19, despite a similar revenue base," she wrote. Estee Lauder shares rose more than 4%. Year to date, the stock is up more than 16%. Analysts are mostly neutral despite Goldman's upgrade. LSEG data shows that 22 of 28 analysts covering Estee Lauder rate it as hold. The remaining six have buy or strong buy ratings. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
