11:22 AM EDT, 03/24/2026 (MT Newswires) -- Estee Lauder ( EL ) would fill a major gap in its fragrance portfolio through a potential merger with Spain's Puig, RBC Capital Markets said Monday in a report.

The merger would also diversify the company's geographic exposure away from China and add scale in Latin America and Europe, the report said. "From a strategic standpoint, this deal makes sense," RBC said.

Estee Lauder ( EL ) has been under pressure since early 2022 due to weakness in Asia travel retail and market-share losses in North America, the report said. RBC said it sees room for recovery as the company works through its organizational overhaul and new strategy.

RBC reiterated its outperform rating on Estee Lauder ( EL ) stock with a price target of $113.

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