) to buy from hold.
Analyst William Schmitz tells S&P MarketScope many factors are aligning favorably for Estee Lauder. He says U.S. GDP growth, improving department store sales, a weak dollar, profit maximization at Estee Lauder-owned retail stores, and his view that the Estee Lauder brand in North America has slowed its rate of decay should fuel continued outperformance.
He says European results should come in strong, while GDP-driven momentum in the U.S. should continue despite tougher competition. He finds it unlikely that William Lauder will bring bad news in his first quarter as CEO-elect.
Schmitz has $1.55 fiscal year 2004 (June) EPS estimate. He raised his $40 price target to $45.