L’Oréal: Resilience Continued in Q1 2025
Company Update (OR FP) (Buy): After the update last week, shares are 26% below their 52-week high and at 27x 2024 EPS.
Highlights
Global market grew just 1-2% in Q1 though L’Oréal sales grew 3.5%.
U.S. market was worse than expected but Mainland China improved.
L’Oréal still expects sales to grow 4.0-4.5% in 2025, but likely at low end.
U.S. import percentages and consumer confidence were discussed.
At €341.85, we see a 63% total return (14.7% p.a.) by 2028 year-end. Buy.
Introduction
We review our Buy rating on L’Oréal after the company’s Q1 2025 sales update on Thursday (April 17).
L’Oréal shares have fallen 5% in the past month and are currently 26.0% below their 52-week high last June:
L’Oréal Share Price (Last 5 Years)
Source: Google Finance (20-Apr-25).
L’Oréal is a mid-sized position in our “Select 15” model portfolio, initiated in September 2024 and expanded in October. We also hold L’Oréal shares in real life. Our current Buy rating on L’Oréal was re-initiated in April 2024, and we published our first online article about L’Oréal in March 2020.
Trading was resilient in Q1 and we still see a ~15% annualized return on L’Oréal shares by 2028 year-end. The U.S. market has got worse during Q1 but Mainland China has got better. It is too early to see the impact of Trump’s policies.
(The rest of this article is for paid subscribers only, but unlocking it costs just $10; you can see a free sample of our research here.)