Analysts Are Downgrading These 5 Stocks

In this article, we discuss the 5 stocks receiving downgrades from analysts. If you want to see more such stocks on the list, go directly to Analysts Are Downgrading These 10 Stocks. 

05. The Estée Lauder Companies Inc. (NYSE:EL)

Number of Hedge Fund Holders: 44

The Estée Lauder Companies Inc. (NYSE:EL) manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide. On May 12, Argus analyst John Staszak downgraded The Estée Lauder Companies Inc. (NYSE:EL) from Buy to Hold. The downgrade is primarily due to concerns about the slow recovery in China and the travel retail segment in Asia, where inventories are increasing. The analyst also highlights The Estée Lauder Companies Inc. (NYSE:EL) recent earnings miss and guidance reduction. As a result, Argus has revised its earnings per share (EPS) estimates for FY23 to $3.80 (down from $6.00) and for FY24 to $6.00 (down from $7.20). However, the firm mentions that if there is an earlier-than-expected recovery in China and the travel retail segment, it will reconsider adding the stock back to its Buy list.

ClearBridge All Cap Growth Strategy made the following comment about The Estée Lauder Companies Inc. (NYSE:EL) in its Q4 2022 investor letter:

“The Estée Lauder Companies Inc. (NYSE:EL), which manufactures and markets cosmetics, fragrances, skin and hair care products across a number of well-known global brands including Clinique, MAC and Bobbi Brown, adds to our group of secular growers. Estee Lauder is a global leader in the prestige beauty space, which has outgrown the broader home and personal care category since 2010 and has historically been recession resilient. The company has substantial brand and pricing power and is over indexed to the highly profitable prestige skin care category. We believe the company’s most recent earnings report and 2023 guidance update, which was cut significantly due to uncertainty over China’s zero-COVID policy (China and travel retail are key growth drivers), provided an attractive entry point. At this point, we believe the stock has been significantly derisked and could see potential upside from a China recovery.”