Estee Lauder Cos Inc (EL US): A New Chapter for the Global Prestige Beauty Leader

We initiate coverage of The Estée Lauder Companies (EL US) at BUY with a target price of USD105.06, implying 32x FY27E adjusted PE. As a global leader in prestige beauty, ELC has built a comprehensive brand portfolio spanning Estée Lauder, La Mer, M·A·C, etc., supported by an extensive global distribution network, with market capitalization rising 13-fold between 2009 and 2021. Since FY2017, growth had become increasingly concentrated on skin care and travel retail, leaving earnings exposed as these tailwinds faded in 2022 amid a tepid post-pandemic recovery in high-end consumption and share pressure from Chinese brands, resulting in a classic Davis double-kill. Following the appointment of a new management team in January 2025, the launch of the Beauty Reimagined strategy in February refocused the growth agenda across five priorities: consumer coverage, transformative innovation, consumer-facing investment, operational efficiency and organizational redesign. Net sales have posted YoY