L'ORÉAL : Barclays remains positive, adjusts its target
April 08, 2024 at 06:12 am EDT
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Barclays reaffirms its 'overweight' recommendation on L'Oréal, but with an adjusted price target of 467 to 462 euros, pointing to a slowdown in mass-market make-up products in the US since last August.
"Recent comments from a major US beauty retailer have reinforced investors' concerns about the beauty category in the US", the broker points out in its note on the French cosmetics giant.
Using Nielsen and Numerator data, Barclays says it analyzes underlying trends and forecasts organic sales growth of 5.3% for L'Oréal in the first three months of the current year.
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L'Oréal is the world leading cosmetic group. The group offers skincare products (39.9% of sales), makeup products (19.7%), haircare products (15.4%), fragrances (12.6%), hair colouring products (8.3%) and other (4,1%). Net sales break down by family of products as follows:
- consumer cosmetics (36.9%): L'Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Essie Niely, Dark and Lovely, Mixa, MG and Carol's Daughter brands;
- luxury cosmetics (36.2%): Lancôme, Kiehl's, Giorgio Armani Beauty, Yves Saint Laurent Beauté, Biotherm, Helena Rubinstein, Shu Uemura, IT Cosmetics, Urban Decay, Ralph Lauren, Mugler, Viktor&Rolf, Valentino, Azzaro, Prada, Takami, A?sop, etc.;
- active cosmetics (15,6%): La Roche-Posay, Vichy, CeraVe, SkinCeuticals, Skinbetter Science, etc.;
- professional products (11,3%): L'Oréal Professionnel, Kérastase, Redken, Matrix and PureOlogy brands.
Products are marketed through mass distribution and distance selling, selective distribution, hair salons and pharmacies.
At the end of 2023, L'Oréal has 37 production sites worldwide.
Net sales are distributed geographically as follows: Europe (31.6%), North America (27%), North Asia (25.9%), Asia/Pacific/Middle East/Africa (8.4%) and Latin America (7.1%).