Clinique named in carcinogen report to ‘damage brand perception,’ says Jefferies

Jefferies analyst Ashley Helgans notes that testing laboratory Valisure filed a petition with the FDA late last night calling for a recall of benzoyl peroxide acne products, which the lab found to be contaminated with high levels of benzene, including Clinique being named as a brand with high levels of the carcinogen. The firm expects this to “heavily damage brand perception,” hurting Estee Lauder’s topline as Clinique accounts for about 30% of sales. In addition, Estee Lauder’s plan to rebrand Clinique and bring the brand into the clinically-backed skincare space will be challenged and will require greater investment or redirection, according to the firm, which views the stock as “likely range bound between $135-$150” in the near-term. Jefferies keeps a Hold rating and $132 price target on Estee Lauder shares.