Estée Lauder (NYSE:EL) is turning a corner and could return to topline growth as soon as the first fiscal quarter of the year with double-digit EBIT margins by FY27, as the company’s efforts to “right the ship” earns an upgrade to Buy from Hold from Goldman Sachs.
Analyst Bonnie Herzog believes the cosmetic company has entered a “fundamental inflection point” driven by strategic initiatives put in place by management, including brand launches on Amazon (AMZN) and TikTok, and its “consumer-first approach” to drive faster innovation.
“We believe management is taking steps in the right direction with its ‘Beauty Reimagined’ strategic vision,” Herzog says in her note to clients, adding that improving trends in China makes the stock an attractive buy at its current price, advising clients to “load up on shares.”
The turn of events for Estée Lauder (NYSE:EL) is a long-time coming as the company struggled with the evaporating travel retail category during the pandemic (which has yet to fully recover), and more nimble competitors. Travel retail, which at one time accounted for nearly a third of the company’s sales, dwindled to just 15% in FY25. And as recently as August 2025, the company continued to lament the erosion in travel retail and warned that FY26 profits would also be undermined by tariffs, restructuring charges, and anemic sales growth.
However, Wall Street analysts, including Herzog, are now confident that the worst may be behind Estée Lauder (NYSE:EL). The stock was recently upgraded to Buy at HSBC and Deutsche Bank, and reaffirmed as a Buy at BofA Securities.
After tumbling nearly 7% on Friday in a broad market sell-off, Estée Lauder shares are rebounding 4.5% in Monday’s premarket trading, lifted by Goldman’s upbeat outlook and giving a boost to peers in the beauty space including Coty (COTY), e.l.f. Beauty (ELF), Ulta Beauty (ULTA), and The Beauty Health Company (SKIN).