Investors Bet Estée Lauder Deal Will Put Pressure on Turnaround

Wall Street sees potential for big wins for Estée Lauder Cos. if it moves forward with a deal with Puig Brands SA, but the risks of executing that transaction while the US cosmetics company is in the midst of its own turnaround outweigh the benefits.

“Investors are telling you what they think right now – that this is not going to go well,” RBC Capital Markets analyst Nik Modi said in an interview. Estée Lauder’s shares were down 10% at 1:02 p.m. in New York.