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L'Oreal SA (LRLCY)
:LRLCY
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L'Oreal
(OTC:LRLCY)
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Rating:71Outperform
Price Target:
$95.00
▲(11.82% Upside)
L'Oreal's strong financial performance is the most significant factor, showcasing robust revenue and profit growth, solid margins, and impressive cash flow generation. Technical analysis indicates potential short-term weakness, while valuation metrics suggest the stock is relatively expensive. The absence of earnings call data and corporate events means these factors do not influence the score.
Positive Factors
Strategic Partnership
The strategic partnership with Kering enhances L'Oreal's position in luxury beauty, providing access to high-end brands like Gucci, which can drive long-term revenue growth and market expansion in the luxury segment.
Revenue Growth
The consistent increase in sales indicates strong market demand and effective business strategies, supporting L'Oreal's growth trajectory and reinforcing its market leadership in the beauty industry.
Cash Flow Generation
Robust cash flow generation provides L'Oreal with financial flexibility to invest in growth opportunities, sustain operations, and return value to shareholders, ensuring long-term business sustainability.
Negative Factors
Earnings Decline
The decline in earnings per share growth suggests potential challenges in maintaining profitability, which could impact investor confidence and limit financial resources for future investments.
Acquisition Costs
The EUR 4 billion acquisition cost for Kering's beauty assets may strain L'Oreal's financials, potentially impacting cash reserves and increasing leverage, which could affect future financial flexibility.
Market Competition
Intense competition in the dynamic global beauty market could pressure L'Oreal's market share and margins, requiring continuous innovation and strategic investments to maintain its competitive edge.
L'Oreal (LRLCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$231.12B
Dividend Yield1.86%
Average Volume (3M)4.93K
Price to Earnings (P/E)34.8
Beta (1Y)0.23
Revenue Growth3.19%
EPS Growth-4.86%
CountryUS
Employees94,397
SectorConsumer Defensive
Sector Strength42
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)1.62
Shares Outstanding2,668,915,000
10 Day Avg. Volume14,784
30 Day Avg. Volume4,928
Financial Highlights & Ratios
PEG Ratio7.44
Price to Book (P/B)5.48
Price to Sales (P/S)4.18
P/FCF Ratio27.35
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue5.31
Enterprise Value/Gross Profit7.17
Enterprise Value/Ebitda23.73
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)2.96
Revenue Forecast (FY)$51.26B
L'Oreal Business Overview & Revenue Model
Company DescriptionL'Oreal (LRLCY) is a global leader in the beauty and cosmetics industry, specializing in the development and marketing of a wide range of beauty products across multiple sectors, including skincare, haircare, makeup, and fragrances. Founded in 1909, the company operates through various divisions, including Professional Products, Consumer Products, L'Oreal Luxe, and Active Cosmetics. L'Oreal's extensive portfolio includes well-known brands such as Maybelline, Lancôme, Garnier, and Kérastase, catering to diverse consumer preferences and market segments worldwide.
How the Company Makes MoneyL'Oreal generates revenue primarily through the sale of beauty products across its various divisions. The Consumer Products division, which includes mass-market brands, is a significant revenue contributor, driven by high-volume sales in retail channels. The Professional Products division supplies haircare and styling products to salons and professionals, while the L'Oreal Luxe division focuses on high-end cosmetics and fragrances, appealing to premium market segments. Additionally, the Active Cosmetics division offers dermatological products aimed at health-conscious consumers. The company leverages partnerships with retailers, e-commerce platforms, and beauty salons to enhance distribution and reach. Significant marketing campaigns and brand collaborations also contribute to its earnings. L'Oreal invests heavily in research and development to innovate and expand its product offerings, further driving sales and customer loyalty.
L'Oreal Earnings Call Summary
Earnings Call Date:Feb 06, 2025
(Q4-2024)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
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 exhibits strong financial health with consistent revenue and profit growth, solid margins, and a stable balance sheet. The company's ability to generate cash flow is impressive, supporting its financial flexibility and capacity for future investments. While leverage is well-managed, continued focus on maintaining healthy margins and cash flow will be crucial for sustaining growth.Income Statement
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.85
Very Positive
Balance Sheet
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.78
Positive
Cash Flow
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.82
Very Positive
| 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 | 9.82B | 9.64B | 8.97B | 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 | -1.38B | -3.70B | -4.14B | -2.22B | -1.63B | -2.64B |
| Financing Cash Flow | -5.48B | -4.79B | -1.61B | -4.08B | -8.86B | -2.59B |
L'Oreal Technical Analysis
Positive
84.96
Price Trends
85.72
Positive
87.74
Negative
84.86
Positive
Market Momentum
0.41
Negative
57.88
Neutral
68.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRLCY, the sentiment is Positive. The current price of 84.96 is above the 20-day moving average (MA) of 84.08, below the 50-day MA of 85.72, and above the 200-day MA of 84.86, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 57.88 is Neutral, neither overbought nor oversold. The STOCH value of 68.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LRLCY.
L'Oreal Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $145.80B | 24.28 | 28.36% | 3.41% | -0.30% | -14.60% | |
71 Outperform | $231.12B | 34.83 | 19.48% | 1.86% | 3.19% | -4.86% | |
68 Neutral | $335.20B | 20.94 | 31.90% | 2.91% | 1.23% | 17.97% | |
63 Neutral | $62.93B | 21.88 | 450.35% | 2.64% | -0.05% | 2.49% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
56 Neutral | $37.88B | ― | -20.73% | 1.33% | -6.36% | -554.84% | |
47 Neutral | $3.02B | ― | -9.96% | ― | -5.68% | -358.36% |
* Consumer Defensive Sector Average
LRLCY
L'Oreal
86.84
12.76
17.22%
CL
Colgate-Palmolive
78.07
-12.67
-13.96%
EL
The Estée Lauder Companies
105.13
24.87
30.99%
PG
Procter & Gamble
143.45
-22.95
-13.79%
UL
Unilever
59.48
2.58
4.53%
COTY
Coty
3.45
-4.30
-55.48%
L'Oreal Corporate Events
L’Oréal Reports Steady Growth in 2025 Half-Year Results
Jul 31, 2025
L’Oréal SA is a leading global beauty company, known for its diverse portfolio of 37 international brands and its commitment to innovation and sustainability in the beauty industry. The company operates across various distribution networks including e-commerce, mass market, and professional channels.
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.