Estee Lauder Companies (EL) is one of the leading players in the global cosmetics space and commands a strong portfolio of well-established brands. The company is currently undertaking initiatives to reduce overheads and optimize inventory levels, which augur well for future operating performance.
Furthermore, Estee Lauder has a consistent track record of returning cash to shareholders in the form regular dividend payments. Additionally, the company reported a robust second quarter 2011, with earnings up 38% year-over-year.
Quarterly earnings also outpaced the Zacks Consensus Estimate by 23%. We are currently upgrading our recommendation on Estee Lauder from Neutral to Outperform. The shares have a Zacks #1 Rank (Strong Buy).
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