L'Oreal (OR) AI Stock Analysis

• Market Cap: €189.54B
• Dividend Yield: 1.91%
• Average Volume (3M): 351.32K
• Price to Earnings (P/E): 31.7
• Beta (1Y): 0.73
• Revenue Growth: 2.60%
• EPS Growth: -5.44%
• Country: FR
• Employees: 94,397
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 7.07
• Shares Outstanding: 533,783,000
• 10 Day Avg. Volume: 286,001
• 30 Day Avg. Volume: 351,321
• PEG Ratio: 7.48
• Price to Book (P/B): 5.51
• Price to Sales (P/S): 4.20
• P/FCF Ratio: 27.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €378.45
• Price Target Upside: 4.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: €411.00 ▲(13.25% Upside)

L'Oreal's strong financial performance is the most significant factor driving the stock score, reflecting its robust revenue growth, profitability, and cash flow management. However, the technical analysis indicates mixed signals with a short-term downtrend, and the valuation suggests the stock may be overvalued, which slightly dampens the overall score.

Positive Factors

Strategic Partnership

The partnership with Kering enhances L'Oreal's position in luxury beauty, providing access to high-end brands and expanding its market presence.

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

Cash Flow Management

Strong cash flow management ensures financial flexibility and supports strategic investments, enhancing long-term stability.

Negative Factors

Earnings Decline

A decline in earnings per share can indicate challenges in maintaining profitability, potentially impacting future financial performance.

Valuation Concerns

High valuation ratios may limit stock price appreciation potential and reflect market expectations that could be difficult to meet.

Debt Acquisition

Large acquisitions can increase financial leverage and risk, potentially straining resources if not managed effectively.

L'Oreal Business Overview & Revenue Model

Company Description

L'Oréal S.A., through its subsidiaries, manufactures and sells cosmetic products for women and men worldwide. The company operates through four divisions: Consumer Products, L'oréal Luxe, Professional Products, and Active Cosmetics. It offers shampoos, hair care products, shower gels, skin care products, cleansers, hair colors, styling products, deodorants, sun care products, make-up, perfumes, etc. The company provides its products under the L'Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Essie, Niely, Dark and Lovely, Lancôme, Yves Saint Laurent Beauté, Giorgio Armani Beauty, Kiehl's, Urban Decay, Biotherm, Ralph Lauren, IT Cosmetics, L'Oréal Professionnel, Kérastase, Redken, Matrix, Biolage, Pureology, Decléor, Carita, Vichy, La Roche-Posay, SkinCeuticals, Roger&Gallet, CeraVe, Stylenanda, Mixa, Magic Mask, Prada, Helena Rubinstein, Valentino, Mugler, Shu Uemura, Viktor&Rolf, Azzaro, Diesel, Atelier Cologne, Cacharel, and Yue Sai brands. It sells its products through distribution channels, such as hair salons, mass-market retail channels, perfumeries, department stores, pharmacies, drugstores, medispas, branded retail, travel retail, and e-commerce. L'Oréal S.A. was founded in 1909 and is headquartered in Clichy, France.

How the Company Makes Money

L'Oreal generates revenue through the sale of a wide range of beauty products across multiple distribution channels, including retail, e-commerce, and professional salons. Key revenue streams include mass-market products, luxury cosmetics, professional products, and active cosmetics. The company also invests heavily in research and development to innovate and expand its product offerings, which helps in maintaining a competitive edge. Strategic partnerships with retailers, beauty influencers, and online platforms further enhance its market reach. Additionally, L'Oreal's strong global presence allows it to capitalize on emerging markets and adapt to changing consumer trends, contributing significantly to its overall earnings.

L'Oreal Financial Statement Overview

Summary

L'Oreal demonstrates strong financial health across all verticals. The company shows significant revenue and profit growth, maintains a stable balance sheet with low leverage, and exhibits robust cash flow generation and management. These factors contribute to its excellent financial performance and stability in the consumer products industry.

Income Statement

L'Oreal has shown strong revenue growth with a 5.6% increase from 2023 to 2024. The gross profit margin remains robust at 74.2%, reflecting cost efficiency. The net profit margin improved to 14.7%, indicating better profitability. EBIT and EBITDA margins are healthy at 20.0% and 24.5%, respectively, showcasing operational strength.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.26, indicating low financial leverage. The return on equity is strong at 19.3%, highlighting efficient use of equity capital. An equity ratio of 58.8% underscores a stable capital structure with a significant equity base.

Cash Flow

L'Oreal exhibits impressive cash flow management with a free cash flow growth rate of 8.6%. The operating cash flow to net income ratio is 1.29, suggesting effective cash conversion. The free cash flow to net income ratio is 1.04, reflecting healthy cash flow relative to net earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.84B	43.49B	41.18B	38.26B	32.29B	27.99B
Gross Profit	32.49B	32.26B	30.42B	27.68B	23.85B	20.46B
EBITDA	11.03B	10.39B	9.94B	9.16B	7.54B	6.47B
Net Income	6.12B	6.41B	6.18B	5.71B	4.60B	3.56B
Balance Sheet
Total Assets	54.60B	56.35B	51.86B	46.84B	43.01B	43.61B
Cash, Cash Equivalents and Short-Term Investments	4.82B	4.08B	4.32B	2.62B	2.72B	6.41B
Total Debt	8.83B	8.49B	8.69B	5.65B	6.30B	2.55B
Total Liabilities	23.42B	23.22B	22.77B	19.66B	19.42B	14.61B
Stockholders Equity	31.18B	33.13B	29.07B	27.18B	23.59B	28.99B
Cash Flow
Free Cash Flow	7.40B	6.64B	6.12B	4.93B	5.65B	5.48B
Operating Cash Flow	9.02B	8.29B	7.60B	6.28B	6.73B	6.45B
Investing Cash Flow	-1.39B	-3.70B	-4.14B	-2.22B	-1.63B	-2.64B
Financing Cash Flow	-5.46B	-4.79B	-1.61B	-4.08B	-8.86B	-2.59B

L'Oreal Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 362.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:OR, the sentiment is Negative. The current price of 362.9 is below the 20-day moving average (MA) of 367.89, below the 50-day MA of 365.21, and below the 200-day MA of 371.84, indicating a bearish trend. The MACD of -1.58 indicates Positive momentum. The RSI at 46.07 is Neutral, neither overbought nor oversold. The STOCH value of 37.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:OR.

L'Oreal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RBT	76 Outperform	€1.72B	18.64	18.22%	1.15%	10.55%	13.50%
OR	71 Outperform	€189.54B	31.67	20.13%	1.91%	2.60%	-5.44%
ITP	69 Neutral	€2.05B	15.12	20.31%	3.66%	9.68%	19.46%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
EDEN	62 Neutral	€4.44B	8.98	―	6.47%	7.04%	73.35%
SW	61 Neutral	€6.44B	9.12	18.37%	6.20%	1.16%	314.94%
JBOG	56 Neutral	€58.14M	-5.78	―	3.88%	-3.97%	-269.15%