Wells Fargo sees limited further upside for Estee Lauder, downgrades shares
Wells Fargo analyst Bonnie Herzog downgraded Estee Lauder to Market Perform from Outperform and lowered her price target for the shares to $135 from $165. With the stock up 69% since bottoming in December 2016, the analyst sees limited room for additional upside in the near-to-medium term. The analyst expects Estee's growth profile to revert back to its 6%-8% currency neutral net sales growth algorithm "in the face of increasingly tough comps." This makes it difficult to justify further upside to the company's "still very rich valuation," Herzog tells investors in a research note. She thinks investors will be hesitant to invest new money in a company whose sales growth, "while still strong, appears poised to decelerate."