(Boursier.com) — Complicated weekend for luxury. After the brilliant publications of LVMH and HermesKering and L’Oreal somewhat dampened the mood. The world’s number one cosmetics company reported strong sales growth in the third quarter, as demand in Europe and the United States offset disruption in China linked to health restrictions. L’Oréal, which owns consumer brands like Maybelline and other higher-end brands like Lancôme, thus achieved revenues of 9.58 billion euros, up 9.1% on a like-for-like basis.
But analysts are concerned about the slowdown at L’Oreal Luxe, which only recently overtook the company’s consumer division to become the group’s largest, and has been driving growth in recent quarters. Jefferies thus explains that he has “mixed feelings” about the figures published by L’Oréal and underlines in particular that the results of the luxury division are below expectations. RBC, for its part, indicates that the growth of L’Oréal was inflated by a bonus of 94.7 million euros in insurance.
Oddo BHF remains ‘neutral’ with a target of 346 euros. The analyst considers L’Oréal to be a high-quality stock (pure player with a deep operational footprint in a growing and valuing market) but with too high a valuation (PE 23rd: 28x). With organic growth of 9.1% in Q3, this is a fine performance, still above that of the Beauty market (+6%) and improving sequentially. Before the opening, the broker nevertheless warned that the context is leaning investors towards vigilance and as such, the reception could be negative due to: a valuation that remains high, the weakness of Asia North (ie China) and Luxury, a drop in Consumer volumes in China and the USA and the difficulty of reconciling the performance of North Asia with that of China; which should prompt a few requests for clarification.
L’Oréal drops 4.2% to 315.4 euros in the morning in Paris.
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