L’Oreal’s Growth Challenges and Market Outlook: Hold Rating Amidst IT System Impacts and European Market Softening

In a report released today, David Hayes from Jefferies maintained a Hold rating on L’Oreal (0NZM – Research Report), with a price target of €369.00.

David Hayes has given his Hold rating due to a combination of factors impacting L’Oreal’s performance. The company is expected to experience a slowdown in like-for-like growth in the second quarter, with a forecast of 2.6% compared to the consensus of 3.0%. This is partly due to the impact of IT system changes in the US and China, which have affected market visibility and growth projections.
Despite the challenges in the US and China, the market is anticipated to grow by 3.4% in the fiscal year 2025. However, with a price-to-earnings ratio of 27.5x, Hayes does not see a compelling opportunity for significant upside. Additionally, the European market is showing signs of softening, with expected growth slowing from 4.3% in the first quarter to 3.0% in the second quarter.

In another report released on June 11, Bernstein also maintained a Hold rating on the stock with a €430.00 price target.