David Hayes, an analyst from Jefferies, maintained the Sell rating on L’Oreal. The associated price target remains the same with €337.00.
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David Hayes has given his Sell rating due to a combination of factors that suggest potential challenges for L’Oreal’s stock performance. While the company is showing some positive momentum in key markets like the US and China, Hayes points out that the current consensus on sales growth might be overly optimistic. The projected growth rate, although favorable, raises questions about whether L’Oreal’s valuation justifies its high price-to-earnings ratio.
Additionally, Hayes highlights the competitive landscape where indie and dupe brands are rapidly gaining market share with their digital-first approach and quicker innovation cycles. L’Oreal, while a leader, needs to balance leveraging its scale with maintaining agility to compete effectively. These dynamics, coupled with the need for deeper integration of science and technology in the industry, contribute to the cautious outlook reflected in the Sell rating.
In another report released on November 26, Barclays also maintained a Sell rating on the stock with a €325.00 price target.