The Estée Lauder Companies Inc. has found itself at the center of conflicting analyst opinions and market commentary, with television personality Jim Cramer expressing strong skepticism about the cosmetics giant’s prospects. Despite shares rising 52% over the past year, Cramer recently stated he would not own Estée Lauder stock, citing concerns about the company’s positioning in the Chinese market and its product portfolio challenges.
Wells Fargo initiated the year with optimism, raising its price target for Estée Lauder to $111 from $95 in January while maintaining an Equal Weight rating. However, following the company’s recent earnings report, the firm reduced its target to $105, noting that high expectations meant results needed to be “pitch-perfect.”
Jim Cramer’s Critical Assessment of Estée Lauder
Cramer delivered a pointed critique of the beauty company during his recent market commentary. According to Cramer, Estée Lauder faces significant headwinds from Chinese market dynamics and lacks the competitive strength needed for recovery. He emphasized that the company’s expensive products are not resonating with Chinese consumers in the way management had anticipated.
“They’re not coming back,” Cramer stated, adding that when dealing with premium-priced products, Chinese consumer preferences can be selective. He suggested that Estée Lauder finds itself “in a lot of the wrong doors,” indicating distribution and brand positioning challenges in the crucial Chinese market.
Stock Performance and Analyst Reactions
The cosmetics company’s shares have experienced volatility, up 52% year-over-year but down 6.8% year-to-date. This mixed performance reflects the uncertainty surrounding the brand’s recovery trajectory following a management change that initially sparked investor optimism. Cramer acknowledged that shares had “run up a lot” following the leadership transition, with early signs suggesting the company might “roar” back to prominence.
However, the momentum appears to have stalled. Additionally, Cramer specifically mentioned that Chinese pricing pressures are hampering the company’s performance in one of the world’s most important luxury markets.
Contrasting Investment Perspectives
Meanwhile, not all institutional investors share Cramer’s pessimistic outlook. Hardman Johnston Global Equity Strategy initiated a position in Estée Lauder during the third quarter of 2025, according to their investor letter. The firm views the company as “a leading player in a structurally attractive beauty industry that has been under-managed in recent years.”
The investment firm’s thesis centers on solid industry dynamics, with global beauty growing at mid-single digits and luxury beauty expanding even faster. Furthermore, Hardman Johnston highlighted the company’s “self-help” measures, including restructuring and productivity improvements that have recovered approximately 600 basis points in gross margin and over 1,000 basis points in operating margin.
Recovery Strategy and Market Position
Estée Lauder has been implementing various initiatives aimed at stabilizing operations and regaining market share after a period of underperformance. According to Hardman Johnston’s analysis, these efforts combined with anticipated mid- to high-single-digit revenue growth should drive strong double-digit earnings growth. The firm believes these improvements will support expanding valuation multiples for the cosmetics stock.
In contrast, Cramer’s assessment suggests fundamental challenges that go beyond operational improvements. His comments about the company not having “the horses” implies a competitive disadvantage that may be difficult to overcome through restructuring alone.
Investors await the company’s next quarterly report and management commentary to determine whether Estée Lauder’s recovery initiatives are gaining traction or if the challenges Cramer outlined will continue to weigh on performance. The divergence between bullish institutional investors and skeptical market commentators suggests significant uncertainty remains about the beauty company’s trajectory.
