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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