What Happened?
Shares of beauty products company Estée Lauder (NYSE: EL) jumped 3.8% in the afternoon session after the stock rebounded amid a broader market rally as Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts. The broad market optimism, which saw the Dow Jones Industrial Average surge over 700 points, overshadowed Estée Lauder's own recent negative news. Just the day before, the company reported a net loss of $1.13 billion for fiscal 2025, marking its third straight year of falling sales. The beauty giant's fourth-quarter net sales declined 12% year-over-year, and it also warned of a potential $100 million impact from tariffs, leading to an annual profit forecast below analyst estimates. The stock had fallen on this news, but today's positive market-wide sentiment is fueling a recovery.
After the initial pop the shares cooled down to $91.13, up 3.9% from previous close.
Is now the time to buy Estée Lauder? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Estée Lauder’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 4.9% on the news that the company reported a sharp decline in sales for its fourth quarter and provided a weaker-than-expected forecast for the upcoming fiscal year. Revenue for the quarter fell 11.9% year on year to $3.41 billion, meeting Wall Street’s expectations. However, other key metrics disappointed investors. While adjusted earnings of $0.09 per share met analyst estimates, it marked a significant drop from $0.64 in the same quarter last year. Furthermore, the company reported an adjusted EBITDA loss of $180 million, substantially missing analyst projections of a $318.8 million profit. Compounding the weak results, Estée Lauder issued guidance for its 2026 fiscal year with adjusted earnings per share expected to be between $1.90 and $2.10. The midpoint of this range is nearly 10% below the consensus analyst forecast, raising concerns about the company's profitability outlook.
Estée Lauder is up 23.2% since the beginning of the year, but at $91.13 per share, it is still trading 9.6% below its 52-week high of $100.78 from September 2024. Investors who bought $1,000 worth of Estée Lauder’s shares 5 years ago would now be looking at an investment worth $428.70.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
