From Morningstar:

L’Oreal, the world’s largest maker of beauty products, is expected to report 9% revenue growth on a like-for-like basis during the fourth quarter and 11.6% growth for the year. Dermatological Beauty division grew 28.7% to reach €4.9 billion in sales. Consumer Products division grew 14.5% during the same period.

Fourth-quarter revenue is expected to reach €11 billion, while full-year revenue should reach €41.5 billion. Earnings before interest and taxes is seen at €8.2 billion for the full year. Net income and EPS are seen at €6.5 billion and €12.15 per share, respectively.

Morgan Stanley analyst Sarah Simon expects L’Oreal to continue outperforming the broader beauty industry in the full year 2024, with like-for-like growth of +8.3%. However, UBS analysts are more sceptical, considering it “unlikely” L’Oreal will be able to report a fourth consecutive year of double-digit like-for-like sales growth in 2024.
Morningstar analyst Dan Su estimates L’Oreal’s fair value is €388 per share.

Morningstar expects luxury and derma-based product sales to exceed the corporate average, expanding by 8% and 11% annually. They anticipate operating margins to expand by 220 basis points to 21.7% at the end of a 10-year forecast period. The margin expansion is driven by price mix improvements from a sharper focus on luxury and on revenue growth management initiatives.

L’Oreal has a Wide Economic Moat thanks in part to strong brand equity associated with a well-balanced beauty portfolio, tight retailer partnership, and a competitive cost structure. The firm is not immune to macroeconomic headwinds and geopolitical tensions that could weigh on consumer demand.

The proliferation of online marketplace and digital marketing has disrupted the beauty market. L’Oreal remains a leader in e-commerce and online advocacy, but the company’s global brands are constantly under scrutiny given the ubiquity of mobile phones and social media.



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