David Hayes, an analyst from Jefferies, maintained the Hold rating on L’Oreal. The associated price target remains the same with €369.00.
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David Hayes has given his Hold rating due to a combination of factors related to the performance and expectations of L’Oreal’s Luxe division. The recent growth figures from LVMH’s Perfume & Cosmetics division, which often serve as a benchmark for L’Oreal’s Luxe segment, suggest that the current market consensus for L’Oreal’s organic sales growth might be slightly optimistic. Despite LVMH’s slight outperformance, historical correlations between these divisions have weakened, indicating that L’Oreal’s Luxe division might not achieve the expected growth rates.
Furthermore, when considering the last year’s performance as a more relevant indicator, Hayes believes that the consensus estimate for L’Oreal’s Luxe division could be overstated. He anticipates a more modest growth outcome, which could pose a minor risk to the overall group performance. This cautious outlook, based on both historical and recent performance trends, underpins his decision to maintain a Hold rating on L’Oreal’s stock.
In another report released on July 21, Morgan Stanley also maintained a Hold rating on the stock with a €369.00 price target.