Estee Lauder "underweight," target price reduced - update

17.08.07 - Lehman Brothers

NEW YORK, August 17 (newratings.com) - Analyst Lauren R Lieberman of Lehman Brothers maintains his "underweight" rating on The Estee Lauder Cos Inc (EL), while reducing his estimates for the company. The target price has been reduced from $46 to $44.

In a research note published this morning, the analyst mentions that the company has posted its F4Q EPS short of the estimates and the consensus. Estee Lauder?s unfocused business strategy and the complexity of the portfolio are expected to result in unpredictable and unstable earnings growth going forward, Lehman Brothers adds. The analyst expresses his concerns surrounding the company?s resource allocation strategy for FY08. The EPS estimates for 2007 and 2008 have been reduced from $2.24 to $2.16 and from $2.50 to $2.34, respectively.