L'Oréal: Stifel maintains its target price
(CercleFinance.com) - Stifel maintains its Buy rating on L'Oréal shares, maintaining its target price at E440.
The analyst points out that L'Oréal's LFL growth slowed to +3.4% in 3Q24 vs. +7.3% in H1 2024, below consensus of +6% and our forecast of +5%.
Stifel says that the main drivers of this 3% gap were dermatological beauty (+0.8% LFL) and consumer products (+1.4% LFL) from a divisional perspective, while North Asia (-6.5% LFL) was the main negative surprise from a regional perspective.
Despite weak sales in Q3 2024 and plans to strengthen its innovation pipeline to accelerate growth again in 2025, L'Oréal has reiterated its expectations of gradual margin expansion for FY 2024-25. As a result, Stifel expects consensus EBIT forecasts for FY 2024-25 to decline by around 3% at first glance.
The Chinese ecosystem is expected to remain challenging in Q4 2024, but could be close to bottoming out if, and this is a big if, further government fiscal measures gradually improve consumer confidence in 2025, the broker adds.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
The analyst points out that L'Oréal's LFL growth slowed to +3.4% in 3Q24 vs. +7.3% in H1 2024, below consensus of +6% and our forecast of +5%.
Stifel says that the main drivers of this 3% gap were dermatological beauty (+0.8% LFL) and consumer products (+1.4% LFL) from a divisional perspective, while North Asia (-6.5% LFL) was the main negative surprise from a regional perspective.
Despite weak sales in Q3 2024 and plans to strengthen its innovation pipeline to accelerate growth again in 2025, L'Oréal has reiterated its expectations of gradual margin expansion for FY 2024-25. As a result, Stifel expects consensus EBIT forecasts for FY 2024-25 to decline by around 3% at first glance.
The Chinese ecosystem is expected to remain challenging in Q4 2024, but could be close to bottoming out if, and this is a big if, further government fiscal measures gradually improve consumer confidence in 2025, the broker adds.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.