JPMorgan downgraded Estee Lauder (EL) to Neutral from Overweight with a price target of $74, down from $113. The firm cites the company’s “persistent” sales declines and limited visibility ahead that led management to withdraw guidance for the downgrade. JPMorgan does not expect to receive any visibility for at least another three months. Because of the company’s operating deleverage from lower than expected volumes in China and Asia travel retail, the execution of its plan and returns will likely be delayed, and as such, it is prudent to advise investors to wait for better signs of improvement in demand, the analyst tells investors in a research note.
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