J.P. Morgan analysts downgraded Estee Lauder Cos. EL, +0.42% to neutral from overweight and cut its price target to $138 from $154 on concerns about slowing travel retail, as it pertains to Chinese customers particularly. Analysts say there’s less opportunity for Estee Lauder to report earnings-per-share beats on margins because of tariff costs. You can find reports of Chinese customs agents employing tighter controls also. “We believe increased scrutiny at border control was another shoe to drop in the prestige/luxury goods industry after investor sentiment already turned more cautious because of uncertainty on what Chinese consumption will undoubtedly be impacted by the existing tariff war,” analysts wrote. J.P. Morgan said it really is “de-rating” in luxury as a result of contact with China. Estee Lauder shares have gained 17% within the last year as the S&P 500 index SPX, +1.52% is up 7% for the time.
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