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 raise concerns about L’Oreal’s future performance. Despite the Luxe division’s impressive track record of outperforming the luxury beauty market for 14 consecutive years, there are signs that the growth in fragrance and luxury content may be normalizing. This could potentially impact the division’s ability to maintain its historical growth rates.
Additionally, while the Luxe division has demonstrated strong profitability with a significant margin advantage over competitors, there is apprehension about the company’s potential shift away from its successful reinvestment strategy. This strategy has been a key driver of its success over the past 15 years. The concern is that any deviation from this approach might affect the division’s ability to sustain its profitability and growth, leading to a more cautious outlook on L’Oreal’s stock.
According to TipRanks, Hayes is a 3-star analyst with an average return of 1.4% and a 53.19% success rate. Hayes covers the Consumer Defensive sector, focusing on stocks such as Nestlé SA, Unilever, and DANONE SA.
In another report released today, Barclays also maintained a Sell rating on the stock with a €325.00 price target.