Barclays analyst Lauren Lieberman downgraded Estee Lauder to Equal Weight from Overweight with a price target of $193, down from $210. Yesterday’s disclosure of a cybersecurity incident that “caused and is expected to continue to cause disruption to parts of the company’s business operations” increases concerns that operational challenges at Estee Lauder are broader and more systematic than initially thought, the analyst tells investors in a research note. The firm thinks additional investments are needed “to get the company on firmer footing.” Such investments would significantly curtail any narrative around Estee’s margin recovery and resultant outsized earnings growth, and lead to more muted free cash flow, contends Barclays.
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