L'Oreal (OR) AI Stock Analysis

• Market Cap: €202.62B
• Dividend Yield: 1.83%
• Average Volume (3M): 362.21K
• Price to Earnings (P/E): 31.8
• Beta (1Y): 0.86
• Revenue Growth: 5.60%
• EPS Growth: 3.75%
• Country: FR
• Employees: 94,397
• Sector: Consumer Defensive
• Sector Strength: 61
• Industry: Household & Personal Products
• EPS (TTM): 11.99
• Shares Outstanding: 534,315,370
• 10 Day Avg. Volume: 345,345
• 30 Day Avg. Volume: 362,211
• PEG Ratio: -25.93
• Price to Book (P/B): 6.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.82
• 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: €369.15
• Price Target Upside: -2.57% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 14

• Rating: 81 Outperform
• Price Target: ―

L'Oreal's strong financial performance, characterized by robust revenue growth and efficient cash flow management, is a key driver of its stock score. Positive technical indicators further bolster the score, although the relatively high P/E ratio suggests potential overvaluation, which slightly tempers the overall assessment.

Positive Factors

Regional Performance

Europe impressively outperformed the global category.

Trends and Performance

Better than feared trends in China & Europe make up for soft NORAM. This should support OR outperformance versus peers.

Negative Factors

Currency Impact

Estimates need to come down for FX, and the stock is back up close to 30x earnings, which leaves the short-term positioned somewhat precariously.

Growth Expectations

The global cosmetics category growth is now seen at the lower end of the prior range.

Performance Risks

There is a risk that L'Oreal might miss the formal consensus for the first quarter.

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 primarily through the sale of its extensive range of beauty and personal care products. The company's key revenue streams are divided into four main segments: Professional Products, Consumer Products, L'Oreal Luxe, and Active Cosmetics. The Consumer Products division targets the mass market and includes well-known brands like L'Oreal Paris and Maybelline. The L'Oreal Luxe division offers premium and luxury brands such as Lancôme and Yves Saint Laurent. Professional Products cater to salon professionals with brands like Redken and Matrix. Active Cosmetics focuses on dermocosmetic skincare brands available in pharmacies and drugstores, such as Vichy and La Roche-Posay. L'Oreal also benefits from strategic partnerships and acquisitions that expand its market reach and product offerings. The company's global presence and focus on innovation, digital marketing, and e-commerce also play significant roles in driving its 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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
43.49B	41.18B	38.26B	32.29B	27.99B
	Gross Profit
32.26B	30.42B	27.36B	23.82B	20.47B
	EBIT
8.69B	8.14B	7.04B	6.15B	5.22B
	EBITDA
10.39B	9.66B	9.16B	7.54B	6.47B
	Net Income Common Stockholders
6.41B	6.18B	5.71B	4.60B	3.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.08B	4.32B	2.62B	2.71B	6.41B
	Total Assets
56.35B	51.86B	46.84B	43.01B	43.61B
	Total Debt
8.49B	8.69B	5.65B	6.30B	2.55B
	Net Debt
4.44B	4.40B	3.03B	3.59B	-3.86B
	Total Liabilities
23.22B	22.77B	19.66B	19.42B	14.61B
	Stockholders Equity
33.13B	29.07B	27.18B	23.59B	28.99B
Cash Flow		Free Cash Flow
6.64B	6.12B	4.93B	5.65B	5.48B
	Operating Cash Flow
8.29B	7.60B	6.28B	6.73B	6.45B
	Investing Cash Flow
-3.70B	-4.14B	-2.22B	-1.63B	-2.64B
	Financing Cash Flow
-4.79B	-1.61B	-4.08B	-8.86B	-2.59B

L'Oreal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 378.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 378.9 is above the 20-day moving average (MA) of 376.59, above the 50-day MA of 364.91, and above the 200-day MA of 352.92, indicating a bullish trend. The MACD of 2.83 indicates Positive momentum. The RSI at 53.95 is Neutral, neither overbought nor oversold. The STOCH value of 67.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:OR.

L'Oreal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OR	81 Outperform	€202.62B	31.80	20.60%	1.83%	5.60%	3.75%
Sector *	65 Neutral	$8.88B	15.05	4.75%	203.76%	3.54%	-2.50%
0MUM		€6.42B	12.97		4.10%	―	―
0IUJ		€2.83B	20.57	19.41%	3.13%	―	―
0NZN		€1.72B	20.53	17.71%	0.96%	―	―
0J3F		€8.33B	12.31	16.07%	4.65%	―	―
JBOG		€75.01M	12.10		4.02%	―	―