Estée Lauder (NYSE: EL) shares surged on Monday after Deutsche Bank’s Stephen Powers upgraded the stock from Hold to Buy, citing improved fundamentals and signs of a bottoming global beauty market.
The upgrade also reignites attention on Estée Lauder as a high-conviction play for legendary investor Michael Burry. In his latest 13F filing, Burry revealed that he liquidated all other holdings and doubled down on EL, increasing his position to 200,000 shares at an average cost basis of $66. Since then, the stock has gained roughly 18%, validating the early thesis that Estée Lauder was oversold relative to its long-term value.
Alongside the upgrade, Powers raised his price target from $71 to $95, implying a potential upside of over 20% from the price of $77.86 at the time of publication on Tuesday.
The bullish call sent Estée Lauder shares climbing nearly 5% on Monday, positioning it among the top performers in the S&P 500. Over the past five trading sessions, EL is up 6.98%, and 16.24% over the last month, though it still remains down more than 32% year-over-year as the company works to rebuild momentum.
What Deutsche Bank said
In its research note, Deutsche Bank pointed to a strategic shift underway at Estée Lauder. Historically, the company had leaned heavily on Chinese demand, but that singular focus left it vulnerable when regional headwinds emerged. Now, the beauty giant is pivoting to a more diversified global approach, including localized decision-making and renewed innovation pipelines across core brands.
Powers also believes prior inventory missteps and overstock corrections that weighed on recent earnings are largely behind the company. With major supply chain investments now completed, Estée Lauder has the operational flexibility to improve margins and reaccelerate top-line growth.
Encouragingly, Deutsche sees early signs that the broader beauty industry has stabilized, especially in key markets like China and the U.S.
