12:32 PM EDT, 08/20/2024 (MT Newswires) -- Estee Lauder's ( EL ) financial outlook for fiscal 2025 is below market expectations, however, investors might still see the guidance as "achievable," UBS said in a note emailed Tuesday.

The company said Monday it anticipates per-share adjusted earnings to come in between $2.75 and $2.95 for fiscal 2025 and sales to range between a 1% decrease and a 2% gain on a reported and organic basis.

Analysts, including Peter Grom, said that while the company's revenue guidance was about 5% lower than expected and EPS was 29% below estimates at the midpoint, investors may still find the guidance reasonable, which is why the stock only closed down 2.2% on Monday despite weaker projections.

"At this stage, we think the company's guidance does embed a fair amount of conservatism, but the top and bottom line recovery is taking longer than many have hoped and the path ahead is still uncertain given the moving pieces," the analysts added.

For the stock to have a "meaningful outperformance," investors need to see that the makeup manufacturer can achieve a strong, sustainable organic sales growth of 6% to 8%, especially if there are ongoing issues in certain markets or weaker demand in China. The company's earnings also need to recover quickly, with substantial improvement expected in fiscal 2026, UBS said.

However, the company's shares are expected "to be in somewhat of a holding pattern" for now due to limited visibility on these factors, the analysts said.

UBS slashed Estee Lauder's ( EL ) price target to $104 from $115 while maintaining its neutral rating.

Price: 88.17, Change: -4.68, Percent Change: -5.04