J.P. Morgan analysts downgraded Estee Lauder Cos.
to neutral from overweight and cut its price target to $138 from $154 on concerns about slowing travel retail, particularly as it relates to Chinese customers. Analysts say there’s less chance for Estee Lauder to report earnings-per-share beats on margins due to tariff costs. There are also reports of Chinese customs agents employing tighter controls. “We believe increased scrutiny at border control was another shoe to drop in the prestige/luxury goods industry after investor sentiment already turned more cautious due to uncertainty on how Chinese consumption will be impacted by the current tariff war,” analysts wrote. J.P. Morgan said it is “de-rating” in luxury because of the exposure to China. Estee Lauder shares have gained 17% in the last year while the S&P 500 index
is up 7% for the period.
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