On Wednesday, Stifel, a financial services company, adjusted its price target for L'Oreal SA (OR:FP) (OTC: LRLCY), a leading cosmetics company. The firm reduced the target to €450.00 from the previous €470.00 but kept a Buy rating on the stock. This change comes as Stifel revises its forecast for the company's financial performance for the fiscal years 2024 and 2025.
The firm has slightly decreased its sales and earnings before interest and taxes (EBIT) projections for L'Oreal. Sales forecasts for fiscal years 2024 and 2025 have been trimmed by 0.8%, while EBIT expectations for the same period have been lowered by 1.5%. Despite these adjustments, Stifel anticipates L'Oreal to achieve a like-for-like (LFL) growth of 7.4% in fiscal year 2024, which is a slight decrease from the previously estimated 7.8%.
Stifel's revised operating profit forecast for L'Oreal in fiscal year 2024 now stands at €8.8 billion, a slight dip from the earlier prediction of €8.9 billion. However, the firm expects the operating margin to remain stable at 20%. The adjustments precede L'Oreal's first half of 2024 results, which are scheduled to be released on July 30, 2024.
The firm also noted L'Oreal's potential to significantly outperform the global beauty market, which is projected to grow by 4.5% to 5.0% in 2024. Stifel attributes this to L'Oreal's agility in adapting to market changes and pursuing growth opportunities in areas such as dermatological beauty, prestige fragrances, and emerging markets.
In other recent news, L'Oreal has seen a flurry of analyst activity. RBC Capital upgraded L'Oreal to a Sector Perform rating and raised its target price to EUR 410, citing the company's successful volume growth in spite of challenges such as price hikes and a sluggish Chinese market. However, RBC Capital also revised its earnings forecasts for L'Oreal, indicating an optimistic outlook on the company's financial performance.
Concurrently, Deutsche Bank maintained a Sell rating on L'Oreal, citing potential risks to forecasted earnings indicated by a proprietary geo-location activity tracker. Despite this, HSBC analysts took a more optimistic stance, increasing their price target for L'Oreal to €420 from €410, while maintaining a Hold rating, reflecting positive growth prospects in Europe.
Citi financial analysts also raised their price target on L'Oreal's shares to €450.00, up from €430.00, while maintaining a Neutral rating. This was largely due to L'Oreal's impressive first-quarter organic sales growth. These recent developments highlight the varying perspectives within the financial sector regarding L'Oreal's performance.
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