Estée Lauder Companies Inc. (NYSE:EL) stock rose in Wednesday's premarket trading after the beauty giant unveiled its fiscal 2030 financial targets and outlined its Beauty Reimagined strategy.
The company announced its long-term growth and profitability goals during its Capital Markets Experience event in Shanghai, China.
The announcement follows Estée Lauder's better-than-expected fiscal first-quarter 2027 results on Monday. The company beat Wall Street's earnings and revenue estimates.
Estée Lauder also raised its fiscal 2027 sales and profit forecasts. It expects continued growth in fragrance and skin care and a return to full-year growth in makeup.
Estée Lauder Targets Higher Profit Margins by 2030
Estée Lauder aims to deliver sustainable mid-single-digit annual organic sales growth and double-digit adjusted earnings per share growth through fiscal 2030.
During its earnings call, management forecast organic sales growth of 4% to 5.5% for fiscal 2027.
The company targets an adjusted operating margin of 16.5% to 18.5% by fiscal 2030, up from its fiscal 2027 forecast of 12.9% to 13.7%.
Management expects greater margin expansion in fiscal 2028 than in the following two years. Cost savings from its Profit Recovery and Growth Plan should support the improvement.
Estée Lauder also expects stronger operating cash flow as earnings rise and restructuring payments decline.
Optimized capital spending and improved working capital efficiency should boost free cash flow through fiscal 2030.
Beauty Reimagined Strategy Aims to Accelerate Growth
"We have laid the foundation, we are building momentum, and I firmly believe the best of The Estée Lauder Companies is yet to come," CEO Stéphane de La Faverie said.
The CEO said the company is becoming faster, more agile and more focused on consumers as it moves beyond recovery toward sustainable, profitable growth.
He expects broader sales growth across brands, product categories and regions.
The company aims to balance growth between Eastern and Western markets while attracting more consumers and accelerating product innovation.
Its One ELC operating model focuses on simplifying operations, expanding automation and speeding up decision-making.
These initiatives aim to strengthen profitability and support long-term shareholder returns.
Wall Street Analysts Raise Estée Lauder Price Forecasts
Estée Lauder carries a consensus Hold rating and an average price forecast of $112.40.
Several analysts raised their price forecasts on Nov. 3 following the company's fiscal first-quarter results.
- Citigroup: Buy rating; raised its price forecast to $121.
- JPMorgan: Overweight rating; raised its price forecast to $120.
- Morgan Stanley: Equal-Weight rating; raised its price forecast to $118.
EL Price Action: Estée Lauder shares gained 1.62% to $107.10 in Wednesday's premarket trading, according to market data.
