(BFM Bourse) – The saddler showed in the afternoon a market capitalization higher than that of the cosmetics group.
Is it a simple crossover or a transfer of power? The cosmetics group L’Oréal is overtaken this Friday by the luxury champion Hermès on the stock market, in terms of the value of its shares.
Until then runner-up to LVMH, L’Oréal had a market capitalization of 225 billion euros around 4 p.m., according to Euronext data, compared to 230 billion euros for Hermès, which therefore took second place. LVMH for its part is still far ahead with 405 billion euros. In Europe, Bernard Arnault’s group remains ahead of the Danish Novo Nordisk (around 490 billion euros).
Hermès and L’Oréal display completely opposite dynamics this Friday. The cosmetics group gives up 7.7% while the saddler takes 5%.
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Disappointing growth for L’Oréal
L’Oréal is being punished by the market for posting disappointing growth in the fourth quarter. Between October and the end of December, L’Oréal saw its turnover rise to 10.61 billion euros, up 6.9% on a comparable basis. However, the consensus of analysts cited by Royal Bank of Canada expected a figure of 9.1%. For the Canadian bank, L’Oréal’s organic sales growth was therefore “disappointing” in the fourth quarter.
“This is the opposite of what we have become accustomed to over time,” continues the Canadian bank.
This disappointment is mainly due to China, a country included in the “North Asia” region at L’Oréal. Over the last months of 2023, the owner of the Lancôme, Garnier and Maybelline brands recorded a significant drop in its activity in the region, of 6.2% on a comparable basis, while the consensus cited by Royal Bank of Canada (RBC ) expected modest but positive growth of 0.4%. The gap is therefore significant with analysts’ projections.
Hermès, on the other hand, has once again exceeded expectations. Over the entire period from October to the end of December, the third largest market capitalization on the Paris market generated revenues of 3.37 billion euros, up 12.5% in data published on one year and 17.5% excluding currency effects. According to a consensus cited by Bank of America, analysts on average only expected growth of 14% in the fourth quarter excluding currency effects.
Hermès has not suffered too much from China, located in the “Asia-Pacific excluding Japan” region. Its sales there increased by 14.8% at constant rates, compared to an increase of 10.2% over the previous three months. “Overall, we expect investors to react positively to the release, with Hermès being one of our favorite stocks,” UBS wrote in a note published before the market opened.
Currently, according to the website companiesmarketcap.com, Hermès is, in dollars, the 40th largest capitalization in the world and L’Oréal the 42nd. LVMH, for its part, is in 18th place.
To see if the ranking will not change in the coming days. Investing.com’s consensus puts L’Oréal stock at a 2.6% upside, while analysts’ average price target for Hermès is more than 7% below its current price. Except that analysts could update their forecasts and/or their recommendations in light of the publications delivered by the two groups on Friday and Thursday…
Julien Marion – ©2024 BFM Bourse
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