Estée Lauder Stock Price (NYSE: EL) Tells a Story Through 2024

Despite a rally over the past month of trading, The Estée Lauder Companies' stock (NYSE: EL) has had a year to forget, with the price down 46.25% through 2024. As one of the leaders in the global prestige beauty market, the company has plenty of challenges to work through.

The last month has brought a brief respite for EL stockholders, with gains of 21% bringing the company back to resistance around $82.50. This mark is proving a tough nut to crack, with the $80 to $85 range previously acting as support earlier this year on the chart.

With a market capitalisation standing at $28.06 billion, the company finds itself with it's stock price at levels not seen for almost 10 years. As Estée Lauder moves forward, it faces the intricate task of balancing its strong brand portfolio, strategizing in key markets, and managing leadership transitions.

Estée Lauder boasts a diverse collection of over 20 prominent brands including Estée Lauder, Clinique, MAC, and La Mer. Despite these strengths, the company has been revisiting its growth prospects following a fiscal year 2025 guidance that fell short of analyst expectations. Earnings per share (EPS) estimates for the fiscal year 2025 vary widely, from $1.57 to $4.23, illustrating uncertainty in the company's recovery trajectory. Revenue projections are equally varied, ranging from $14,759 million to $15,700.3 million.

Strategically, Estée Lauder is focusing on rebuilding its brands and spearheading innovation, with particular attention on Western markets. The company's profit recovery plan intends to generate $1.1-1.4 billion in savings, net of reinvestment, by enhancing operational efficiency and optimizing costs. The plan aims to counterbalance challenges such as the mid-teens percentage decline in the prestige beauty market in China. The Chinese market, along with related travel retail, accounts for approximately 30% of Estée Lauder's sales, thereby significantly impacting the company's performance.

The upcoming retirement of CEO Fabrizio Freda at the end of fiscal year 2025 adds another layer of strategic uncertainty, though it might also bring new perspectives to Estée Lauder's leadership.

Analysts have not abandoned bullish intent, with Deutsche Bank recently raising their price target on the stock from $75 to $80. The consensus also remains marginally above current price action. The purchase of more than 385,000 shares by director Paul Fribourg for a little under $25million was also seen as s bullish sign.

Where the company goes from here will depend on the execution, and in part, the China story. A volatile year almost behind it, holders will be looking for a lot better from the stock in 2025.