L'Oréal: UBS no longer believes in Nestlé speculation.

(CercleFinance.com) - UBS this morning confirmed its buy rating on the L'Oréal stock the day after the announcement of the death of Liliane Bettencourt.


However, according to analysts, the chances that Nestlé decides to increase its stake, as it will be able to do in six months' time, are very low. The broker maintains its 12-month target price at 193 euros.

Analysts interpret shareholder agreements as follows; "the event could change the relationship between Nestlé (which owns 23% of L'Oréal) and the Bettencourt family (33%)." In fact, the agreement between both shareholders could end in six months and at the same time, "Nestlé will be free to increase its shareholding in L'Oréal, if it so wishes", indicates a note of research: this supports the share's price.

This may be so, but Mark Schneider, Nestlé's new director, made it clear that he excluded making major acquisitions, and that in any case he was targeting sectors (such as coffee, pet food, water, nutrition, etc.) which a priori were not part of L'Oréal's business. Indeed, the Swiss group also reduced its stake in L'Oréal in 2014.


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