Estée Lauder (EL) Shares Skyrocket, What You Need To Know
What Happened:
Shares of beauty products company Estée Lauder (NYSE:EL) jumped 19.4% in the morning session after the company reported second-quarter results that blew past analysts' EPS expectations. Its operating margin also outperformed Wall Street's estimates. On the other hand, its earnings forecast for the next quarter missed analysts' expectations, and its full-year earnings guidance missed Wall Street's estimates. The company did provide some silver lining, though, projecting a "return to double-digit organic net sales growth in the second half of fiscal 2024." In addition, Estee Lauder announced a restructuring plan as part of its profit recovery efforts, which will result in a 3-5% headcount reduction. Overall, this quarter's results still seemed fairly positive given that outlook for a topline recovery.
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What is the market telling us:
Estée Lauder's shares are not very volatile than the market average and over the last year have had only 6 moves greater than 5%. Moves this big are very rare for Estée Lauder and that is indicating to us that this news had a significant impact on the market's perception of the business.
Estée Lauder is up 5.1% since the beginning of the year, but at $152.82 per share it is still trading 41.5% below its 52-week high of $261.17 from February 2023. Investors who bought $1,000 worth of Estée Lauder's shares 5 years ago would now be looking at an investment worth $1,006.
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