Oppenheimer thinks Estee Lauder will have trouble meeting Wall Street’s high expectations. The firm downgraded the luxury cosmetic stock to perform from outperform on Monday and removed its $250 price target. The stock closed at $188.29 per share on Friday. “As we look forward, we are harder pressed to see shares outperforming from current levels amidst aggressive Street estimates, a still premium valuation vs. history, and risks of a conservative management guide in August,” analyst Rupesh Parikh said. “In contrast to the past, EL is no longer a beat and raise story, in our view, which suggests increased risk to the company’s-premium-multiple.” Parikh added that Oppenheimer expects further caution on forward guidance from company management in the future, although the company could still recover over a longer period thanks to its market prominence. “We believe the company’s positioning to the global prestige beauty category, a strong management team, and consistent track record with M & A position it to continue gaining market share over the longer-term,” he said. Shares have been under pressure from the start of the year with a 24% loss. Last month, the stock tanked 17% after Estee Lauder posted weaker-than-expected earnings for the fiscal third quarter. The company also slashed its fiscal year earnings guidance. EL YTD mountain Estée Lauder year to date — CNBC’s Michael Bloom contributed to this report.
