L'Oreal (OR) AI Stock Analysis

• Market Cap: €207.98B
• Dividend Yield: 1.79%
• Average Volume (3M): 351.32K
• Price to Earnings (P/E): 34.1
• Beta (1Y): 0.74
• 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: 533,752,560
• 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: €384.75
• Price Target Upside: -1.51% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 76 Outperform
• Price Target: €429.00 ▲(9.82% Upside)

L'Oreal's strong financial performance is the most significant factor, showcasing robust growth and stability. The technical analysis indicates a neutral market sentiment, while the valuation suggests a high price relative to earnings, balanced by a reasonable dividend yield.

Positive Factors

Strong Financial Health

L'Oreal's robust financial health, characterized by strong revenue and profit growth and a stable balance sheet, ensures long-term stability and capacity for strategic investments.

Cash Flow Management

Effective cash flow management allows L'Oreal to reinvest in growth opportunities, maintain financial flexibility, and support dividend payouts, enhancing shareholder value.

Operational Efficiency

High gross profit margins indicate L'Oreal's ability to manage costs effectively, supporting sustained profitability and competitive pricing strategies in the long term.

Negative Factors

EPS Decline

A decline in EPS growth suggests challenges in maintaining profitability, which could impact investor confidence and limit future earnings potential if not addressed.

Revenue Growth Deceleration

Slower revenue growth may indicate market saturation or increased competition, potentially affecting L'Oreal's ability to expand its market share and drive future sales.

Lack of Recent Corporate Events

The absence of recent corporate events or strategic initiatives may suggest a lack of proactive measures to drive growth or adapt to market changes, affecting long-term competitiveness.

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 beauty products across various distribution channels, including retail, e-commerce, and professional salons. The company operates through several divisions, with its largest revenue streams coming from its Consumer Products Division, which offers mass-market beauty products, and its Professional Products Division, which serves salons and beauty professionals. Additionally, L'Oreal's Luxury Products Division and Active Cosmetics Division contribute significantly to its earnings through premium and dermatological products. The company also benefits from strategic partnerships and collaborations with retailers and e-commerce platforms, enhancing its market reach. Moreover, L'Oreal invests heavily in research and development to innovate and expand its product offerings, which helps maintain its competitive edge and drive sales growth.

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	9.66B	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: Positive
• Last Price: 390.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 390.65 is above the 20-day moving average (MA) of 373.26, above the 50-day MA of 384.65, and above the 200-day MA of 365.09, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 60.19 is Neutral, neither overbought nor oversold. The STOCH value of 88.41 is Negative, 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	76 Outperform	€207.98B	34.09	20.13%	1.79%	2.60%	-5.44%
SW	75 Outperform	€7.99B	11.82	16.07%	16.27%	6.71%	141.19%
ITP	75 Outperform	€2.51B	17.89	20.31%	3.03%	9.68%	19.46%
RBT	73 Outperform	€1.62B	17.47	18.22%	1.22%	10.55%	13.50%
EDEN	64 Neutral	€4.94B	9.84	―	5.86%	7.04%	73.35%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
JBOG	53 Neutral	€49.70M	12.10	―	4.55%	-3.97%	-269.15%