Analyst David Hayes from Jefferies maintained a Sell rating on L’Oreal and keeping the price target at €340.00.
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David Hayes has given his Sell rating due to a combination of factors related to L’Oreal’s performance in the luxury segment. He notes that the growth in LVMH’s Perfume & Cosmetics division, which can serve as a proxy for L’Oreal’s Luxe division, was modest at 2% for the third quarter. This growth rate aligns closely with the consensus estimate of 1.7%, suggesting that expectations for L’Oreal’s Luxe division might be overly optimistic.
Hayes points out that the underlying consensus estimate for L’Oreal’s Luxe division’s organic sales growth is 5.8%, which is significantly higher than the reported 3.3% when accounting for shipping impacts in 2024/25. Additionally, the two-year compound annual growth rate (CAGR) for L’Oreal’s Luxe division is slightly elevated at 4.4%, compared to LVMH’s more conservative 2.8% for the same period. This discrepancy indicates that L’Oreal’s Luxe division may not achieve the anticipated growth, leading to the Sell rating.
In another report released on October 9, Deutsche Bank also maintained a Sell rating on the stock with a €340.00 price target.