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L'Oreal
(OTC:LRLCY)
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Rating:78Outperform
Price Target:
$108.00
▲(19.76% Upside)
Action:Reiterated
Date:10/30/26
The score is driven primarily by strong underlying financial quality (durable margins, strong returns, manageable leverage) and favorable technicals (price above key moving averages with positive momentum). These positives are tempered by a rich valuation (high P/E) and near-term earnings/cash flow pressures flagged in the earnings call (investment step-up, higher net debt, and dilution from Galderma accounting impacts).
Positive Factors
Durable Profitability
Sustained high gross and operating margins indicate strong brand equity, pricing power and efficient scale across L’Oréal’s portfolio. This profitability supports continued marketing, research and innovation investment while providing resilience as category and regional conditions vary.
Negative Factors
Higher Debt and Variable Cash Flow
Acquisitions and shareholder distributions have increased net debt and absorbed substantial cash, reducing financial flexibility compared with a more internally funded growth profile. Leverage remains manageable, but continued outflows could constrain reinvestment capacity or raise financing sensitivity.
Read all positive and negative factors
Positive Factors
Negative Factors
Durable Profitability
Sustained high gross and operating margins indicate strong brand equity, pricing power and efficient scale across L’Oréal’s portfolio. This profitability supports continued marketing, research and innovation investment while providing resilience as category and regional conditions vary.
Read all positive factors
L'Oreal (LRLCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$260.46B
Dividend Yield1.76%
Average Volume (3M)4.52K
Price to Earnings (P/E)37.0
Beta (1Y)0.35
Revenue Growth10.96%
EPS Growth10.64%
CountryUS
Employees94,610
SectorConsumer Defensive
Sector Strength42
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)2.39
Shares Outstanding2,666,575,000
10 Day Avg. Volume0
30 Day Avg. Volume4,516
Financial Highlights & Ratios
PEG Ratio-4.09
Price to Book (P/B)5.57
Price to Sales (P/S)4.42
P/FCF Ratio27.16
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue5.45
Enterprise Value/Gross Profit7.12
Enterprise Value/Ebitda22.30
Forecast
1Y Price Target
$101.10Price Target Upside12.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)3.08
Revenue Forecast (FY)$53.41B
L'Oreal Business Overview & Revenue Model
Company Description
L'Oréal S.A., a prominent global enterprise, specializes in the development, production, and worldwide distribution of a diverse range of cosmetic and personal care goods catering to both male and female consumers. Its business activities are stru...
How the Company Makes Money
L’Oréal primarily makes money by selling beauty and personal care products across a broad brand portfolio and a diversified set of distribution channels, generating revenue from product sales to retailers, distributors, salons, pharmacies, and dir...
L'Oreal Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Positive
The call emphasized multiple strong operational achievements: robust adjusted like‑for‑like growth (6.5%), record operating margin (21.3%), high e‑commerce growth (18% to EUR 7.4bn), strong division and regional performance (Professional +11.6%, Derm +10.6%, SAPMENA +13.8%), and solid cash generation (operating net cash flow +13.9%). Key challenges were manageable but notable: FX headwinds (-2.8%), sizeable nonrecurring charges (-EUR 430m), heavier A&P investment (+70bps), increased net debt and cash outflows for acquisitions/dividends (free cash flow impact), and accounting/amortization dilution from the Galderma stake (USD ~450m p.a. PPA impact). Overall, the positives (broad growth, record margins, innovation and e‑commerce momentum, clear plan to keep investing) outweigh the negatives, which are largely strategic investments, timing effects and accounting impacts rather than indications of a structural earnings deterioration.Positive Updates
Strong Like-for-Like Growth
Adjusted like-for-like growth of 6.5% (6.8% reported LFL), sales increased 5.8% overall and excluding FX impact growth stood at 8.6% — continuation of sequential acceleration vs prior semesters.
Negative Updates
Foreign Exchange Headwinds
Negative FX impact on sales of -2.8% in the half; projected full-year FX drag reduced to -0.6% but was a material headwind in the period.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Like-for-Like Growth
Adjusted like-for-like growth of 6.5% (6.8% reported LFL), sales increased 5.8% overall and excluding FX impact growth stood at 8.6% — continuation of sequential acceleration vs prior semesters.
Read all positive updates
Company Guidance
Guidance highlights: management expects the global beauty market to grow about 4–5% for full‑year 2026 and says L’Oréal will continue to outperform that market; the exchange‑rate impact extrapolated from June 30 is a -0.6% hit to full‑year sales (an improvement versus the -2.5% assumed at the start of the year); year‑end financial leverage is expected to be below 1.0x (vs. 1.2x at end‑June), with net debt €12.7bn and gearing 37.4% at June 30; full‑year net financial expenses are guided to be roughly €400m; Galderma purchase‑price amortization of about USD 450m p.a. will reduce reported Galderma earnings and contribute to near‑term dilution (group EPS slightly negative in 2026 before returning to small growth in 2027), and Kering consolidation is estimated to be a small (~10bp) margin drag at group level in H2; management signalled continued reinvestment behind innovation (A&P up 70bps to 32.6% in H1) while keeping R&I at ~2.8% of sales and capex around 3% (H1 €760m), with strong cash generation (operating net cash flow H1 €3.1bn, +13.9%); July trading was described as “a very good start.”L'Oreal Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
78
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 45.67B | 44.05B | 43.49B | 41.18B | 38.26B | 32.29B |
| Gross Profit | 34.99B | 32.74B | 32.26B | 30.42B | 27.68B | 23.85B |
| EBITDA | 11.17B | 10.69B | 10.53B | 9.86B | 9.16B | 7.87B |
| Net Income | 6.36B | 6.13B | 6.41B | 6.18B | 5.71B | 4.60B |
Balance Sheet | ||||||
| Total Assets | 66.33B | 61.82B | 56.35B | 51.86B | 46.84B | 43.01B |
| Cash, Cash Equivalents and Short-Term Investments | 4.05B | 9.87B | 4.08B | 4.32B | 2.62B | 2.72B |
| Total Debt | 16.71B | 11.92B | 8.49B | 8.69B | 5.65B | 6.30B |
| Total Liabilities | 32.45B | 26.82B | 23.22B | 22.77B | 19.66B | 19.42B |
| Stockholders Equity | 33.83B | 34.95B | 33.13B | 29.07B | 27.18B | 23.59B |
Cash Flow | ||||||
| Free Cash Flow | 7.74B | 7.16B | 6.64B | 6.12B | 4.93B | 5.65B |
| Operating Cash Flow | 9.25B | 8.66B | 8.29B | 7.60B | 6.28B | 6.73B |
| Investing Cash Flow | -11.84B | -1.41B | -3.70B | -4.14B | -2.22B | -1.63B |
| Financing Cash Flow | 1.69B | -1.40B | -4.79B | -1.61B | -4.08B | -8.86B |
L'Oreal Technical Analysis
Positive
90.18
Price Trends
89.05
Positive
88.47
Positive
87.18
Positive
Market Momentum
2.49
Negative
69.29
Neutral
69.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRLCY, the sentiment is Positive. The current price of 90.18 is below the 20-day moving average (MA) of 90.32, above the 50-day MA of 89.05, and above the 200-day MA of 87.18, indicating a bullish trend. The MACD of 2.49 indicates Negative momentum. The RSI at 69.29 is Neutral, neither overbought nor oversold. The STOCH value of 69.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LRLCY.
L'Oreal Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $374.48B | 23.94 | 29.55% | 2.68% | 3.52% | -3.74% | |
78 Outperform | $260.46B | 36.97 | 18.33% | 1.76% | 10.96% | 10.64% | |
70 Outperform | $140.57B | 13.75 | 58.26% | 3.41% | -17.45% | 8.84% | |
70 Outperform | $37.09B | 21.94 | 16.06% | 5.40% | 1.75% | 16.81% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
60 Neutral | $2.99B | -4.89 | -18.06% | 4.38% | -1.46% | -60.87% | |
57 Neutral | $39.58B | 214.18 | 4.63% | 1.28% | 5.51% | ― |
* Consumer Defensive Sector Average
LRLCY
L'Oreal
97.55
14.94
18.08%
EL
The Estée Lauder Companies
109.23
13.90
14.58%
PG
Procter & Gamble
161.57
15.44
10.57%
UL
Unilever
65.26
2.93
4.70%
COTY
Coty
3.40
-0.57
-14.36%
KVUE
Kenvue, Inc.
19.31
5.76
42.52%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.