Piper Sandler analysts upgraded Estee Lauder (NYSE:EL) to Overweight from Neutral in a note Thursday, citing a more positive outlook following the company's recent fiscal Q4 earnings report.
The firm also raised its price target for EL shares to $114 from $95, reflecting increased confidence in the company's valuation and future prospects.
"We came away from Monday's FQ4 earnings report and estimate reset far more comfortable with current valuation levels," the analysts noted, adding that their conviction in Estee Lauder's forward estimates has strengthened.
This optimism was further bolstered after discussions with the company's management and insights from peer Coty on the state of the prestige beauty market.
According to Piper Sandler, "none of what we heard in the past few days causes us to deviate from this more bullish thinking."
The analysts highlighted the recent management change at Estee Lauder, viewing it as a positive development that could enhance the company's performance moving forward.
Combined with a valuation that suggests limited downside, Piper Sandler sees "little reason to suggest the bear thesis could play out much further here."
Piper Sandler believes that Estee Lauder has "lots of positives ahead," making it a compelling investment opportunity as the company navigates its challenges and capitalizes on growth in the prestige beauty market.