Estee Lauder Earnings: Weak 2023 on Travel Retail Woes; Branding and Innovation To Fuel Recovery

We plan to trim our $256 fair value estimate for wide-moat Estee Lauder by a low-single-digit percentage after assessing fiscal 2023 results and fiscal 2024 guidance. While 2023 revenue at $15.9 billion and EPS at $2.79 edged our estimates of $15.7 billion and $2.77, respectively, this was tempered by a cautious 2024 outlook that fell short of our forecast. We will adjust our projections to approximate management’s 2024 goals (5%-7% sales growth and 23%-33% EPS growth) but plan to stick with our 10-year targets for high-single-digit sales growth and operating margin expanding to 22% by the end of our forecast period. We view the shares as deeply undervalued and suggest investors buy into this beauty leader.