L'Oreal (LRLCY) AI Stock Analysis

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L'Oreal

(OTC:LRLCY)

Rating:80Outperform

Price Target:

$101.00

▲(20.17%Upside)

L'Oreal's overall stock score reflects its strong financial performance and positive earnings call insights, indicating robust operational health and future growth potential. While the premium valuation suggests some caution, the company's strategic initiatives and technical momentum support a favorable outlook.

L'Oreal (LRLCY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$222.64B

Dividend Yield1.89%

Average Volume (3M)3.84K

Price to Earnings (P/E)32.8

Beta (1Y)0.34

Revenue Growth5.65%

EPS Growth3.79%

CountryUS

Employees94,397

SectorConsumer Defensive

Sector Strength66

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)1.17

Shares Outstanding2,671,576,700

10 Day Avg. Volume0

30 Day Avg. Volume3,838

Financial Highlights & Ratios

PEG Ratio-2.10

Price to Book (P/B)1.00

Price to Sales (P/S)0.00

P/FCF Ratio5.84

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$83.20

Price Target Upside-1.01% Downside

Rating ConsensusHold

Number of Analyst Covering1

L'Oreal Business Overview & Revenue Model

Company DescriptionL'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 MoneyL'Oreal generates revenue through its diverse range of beauty and personal care products, distributed across multiple channels including retail, online platforms, and professional salons. The Consumer Products segment, which includes mass-market brands, is a significant revenue driver, reaching a wide audience through supermarkets, pharmacies, and online retailers. The L'Oreal Luxe segment focuses on premium and luxury brands, sold in department stores and specialty retailers. The Professional Products division serves salons with exclusive haircare and styling products, while the Active Cosmetics segment targets dermatological skincare markets, often distributed through pharmacies and medical professionals. Strategic acquisitions, partnerships, and a robust global supply chain further enhance L'Oreal's market position and revenue potential.

L'Oreal Earnings Call Summary

Earnings Call Date:Feb 06, 2025

(Q4-2024)

% Change Since: 16.69%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

L'Oréal experienced a record-breaking year with strong performances in Europe, North America, and emerging markets, as well as impressive growth in key categories like fragrances and hair care. However, challenges in North Asia, particularly in China and travel retail, posed significant hurdles. Despite these challenges, L'Oréal's strategic acquisitions and strong innovation pipeline for 2025 position the company for continued growth.

Q4-2024 Updates

Positive Updates

Record-Breaking Year for L'Oréal

L'Oréal set several new records with a like-for-like growth of 5.1%, gross margin at 74.2%, and operating profit margin reaching 20% for the first time.

Strong Regional Growth

Europe advanced by 8.2%, North America grew by 5.5%, and emerging markets led with 11.7% growth, contributing significantly to overall sales.

Impressive Division Performances

Professional Products grew by 5.3%, Consumer Products by 5.4%, and Dermatological Beauty by 9.8%, with each division surpassing a 21% operating margin.

Fragrances and Hair Care Lead Category Growth

Fragrances grew by 14.1% and Hair Care by 12.7%, making them the fastest-growing categories.

Strategic Acquisitions and Partnerships

Acquisition of Aesop and investment in Galderma, along with strategic partnerships, to enhance the portfolio and capabilities.

Innovative Pipeline for 2025

Strong innovation pipeline expected to drive growth, including new launches in skincare, fragrances, and makeup.

Negative Updates

Challenges in North Asia

Sales in North Asia declined by 3.2% due to continued weakness in Mainland China and travel retail.

Weak Performance in Luxe Division

Luxe division's growth was only 2.7% like-for-like, affected by market turbulence in China despite maintaining a high profit margin.

Slowdown in Chinese Market

The beauty market in Mainland China saw a decline from -2% in H1 to -4% in the full year, affecting overall performance.

Travel Retail Struggles

Travel retail in Asia, particularly in Hainan and Korea, faced significant declines, impacting overall sales.

Company Guidance

During the 2024 Annual Results Presentation, L'Oréal reported several impressive financial metrics. The company achieved a like-for-like growth rate of 5.1%, marking another year of market outperformance. Their gross margin reached an all-time high of 74.2%, up 30 basis points from the previous year, while the operating profit margin increased by 20 basis points, reaching 20% for the first time. Consolidated sales rose by 5.6% to EUR 43.5 billion, with operating net cash flow reaching EUR 6.6 billion, an increase of nearly 9%. Each division contributed to growth, with Professional Products seeing a 5.3% increase, Consumer Products up by 5.4%, L'Oréal Luxe by 2.7% like-for-like, and L'Oréal Dermatological Beauty achieving a 9.8% increase in sales. Regionally, Europe advanced by 8.2%, North America grew by 5.5%, and emerging markets led with an 11.7% increase. Despite a decline in North Asia, the company maintained a strong global footprint, with emerging markets now accounting for more than 16% of sales. The year also marked strategic investments in AI, research, and sustainability efforts, positioning L'Oréal well for future growth.

L'Oreal Financial Statement Overview

Summary

L'Oreal has demonstrated strong financial performance with consistent revenue growth, impressive gross profit margins, and effective cost management, resulting in a robust net profit margin. The balance sheet is solid with a manageable debt-to-equity ratio and healthy ROE, while cash flow generation remains strong, supporting financial flexibility.

Income Statement

Very Positive

L'Oreal has shown strong financial performance with consistent revenue growth, increasing from $27.99 billion in 2020 to $43.49 billion in 2024, and impressive gross profit margins over 74% for the recent year. The net profit margin improved to 14.74% in 2024, indicating effective cost management and profitability. EBIT and EBITDA margins are robust, reflecting efficient operations.

Balance Sheet

Positive

The balance sheet is solid with a consistent increase in stockholders' equity to $33.13 billion by 2024. The debt-to-equity ratio is manageable at 0.26, suggesting conservative leverage. Return on Equity (ROE) is healthy at 19.34% in 2024, indicating effective use of equity. The equity ratio remains strong, showcasing financial stability.

Cash Flow

Very Positive

Cash flow from operations has been strong, reaching $8.29 billion in 2024, and free cash flow has grown significantly, highlighting robust cash generation capability. The free cash flow to net income ratio is stable, indicating efficient cash conversion, while the operating cash flow to net income ratio exceeds 1, demonstrating sound cash flow management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
42.73B	43.49B	41.18B	38.26B	32.29B	27.99B
	Gross Profit
31.70B	32.26B	30.42B	27.36B	23.82B	20.47B
	EBIT
8.38B	8.69B	8.14B	7.04B	6.15B	5.22B
	EBITDA
9.71B	10.67B	9.66B	9.16B	7.54B	6.47B
	Net Income Common Stockholders
6.48B	6.41B	6.18B	5.71B	4.60B	3.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.80B	4.08B	4.32B	2.62B	2.71B	6.41B
	Total Assets
35.63B	56.35B	51.86B	46.84B	43.01B	43.61B
	Total Debt
1.26B	8.49B	8.69B	5.65B	6.30B	2.55B
	Net Debt
-481.40M	4.44B	4.40B	3.03B	3.59B	-3.86B
	Total Liabilities
11.13B	23.22B	22.77B	19.66B	19.42B	14.61B
	Stockholders Equity
24.50B	33.13B	29.07B	27.18B	23.59B	28.99B
Cash Flow		Free Cash Flow
6.01B	6.64B	6.12B	4.93B	5.65B	5.48B
	Operating Cash Flow
7.55B	8.29B	7.60B	6.28B	6.73B	6.45B
	Investing Cash Flow
-4.17B	-3.70B	-4.14B	-2.22B	-1.63B	-2.64B
	Financing Cash Flow
-5.58B	-4.79B	-1.61B	-4.08B	-8.86B	-2.59B

L'Oreal Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price84.05

Price Trends

50DMA

84.56

Negative

100DMA

79.67

Positive

200DMA

77.87

Positive

Market Momentum

MACD

0.24

Positive

RSI

44.51

Neutral

STOCH

1.36

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRLCY, the sentiment is Neutral. The current price of 84.05 is below the 20-day moving average (MA) of 85.58, below the 50-day MA of 84.56, and above the 200-day MA of 77.87, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 44.51 is Neutral, neither overbought nor oversold. The STOCH value of 1.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LRLCY.

L'Oreal Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRLCY	80 Outperform	$222.64B	32.83	20.87%	1.89%	5.65%	3.79%
UL	76 Outperform	$151.81B	24.92	30.53%	3.35%	1.99%	-10.59%
PG	74 Outperform	$372.97B	25.27	30.29%	2.66%	-0.16%	2.74%
Sector *	65 Neutral	$8.75B	15.13	4.69%	4.84%	3.64%	-2.51%
CL	64 Neutral	$71.47B	24.97	977.07%	2.37%	0.98%	12.12%
EL	57 Neutral	$27.05B	147.29	-17.27%	1.86%	-3.70%	-235.59%
COTY	56 Neutral	$4.16B	40.12	-10.58%	―	-1.68%	-302.11%

* Consumer Defensive Sector Average

Performance Comparison

LRLCY

L'Oreal

84.05

-10.82

-11.41%

Colgate-Palmolive

87.78

-9.12

-9.41%

The Estée Lauder Companies

75.19

-37.44

-33.24%

Procter & Gamble

159.08

-5.35

-3.25%

Unilever

61.27

6.76

12.40%

COTY

Coty

4.77

-5.36

-52.91%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.