L'Oréal: Upgrade To Buy After 22% Correction From Peak
(Preview) Rating Change (OR FP) (Upgrade to Buy)
Summary
We are upgrading our rating on L'Oréal, after shares fell 22% from their peak, back to 5% below the level at our previous downgrade.
With structural market growth in Beauty, L'Oréal sales growing faster than market and margins expanding, we expect an EPS CAGR near 10%.
2021 results showed continuing strong operational performance, with broad-based growth across segments and regions.
With L'Oréal shares at €338.20, we expect an exit price of €469 and a total return of 46% (10.6% annualized) by 2025 year-end. Buy.
Within Beauty, Estée Lauder shares are even more attractive, as their P/E is slightly lower even though their EPS is expected to grow faster.
Introduction
We are upgrading our rating on L'Oréal SA from Hold to Buy after shares fell 22% from their early-January peak, back to 5% below the level at which we downgraded our rating back in May 2021.
L'Oréal ADR Share Price History vs. Librarian Capital Rating
We have a longstanding interest in L'Oréa…