** Shares of U.S. cosmetics maker Estée Lauder EL.N jump 10% to $86.81 premarket

** Co ended merger talks with Spanish perfumery Puig PUIGb.MC that would have created a premium beauty powerhouse better positioned to compete with industry leader L’Oréal OREP.PA

** Shares of Puig fall nearly 14% to €15.15

** The talks, revealed in March, would have created a $40 bln luxury beauty group combining Estée brands like Tom Ford, Clinique and MAC with Puig labels such as Carolina Herrera and Charlotte Tilbury

** Co said it remains focused on its Beauty Reimagined turnaround plan under CEO Stéphane de La Faverie to revive sales and market share, including boosting store investment and closing underperforming outlets

** Morningstar says "while the deal stood to strengthen co's position in fragrance, we were skeptical, given the potential deal's size and the distraction it could pose for management amid its ongoing turnaround; thus, we see this decision as sound"

** 11 of 26 brokerages rate the stock "buy" or higher, 14 "hold" and 1 "sell"; their median PT is $88.5 - LSEG-compiled data

** As of last day's close, stock down 24.64% YTD