Berenberg upgrades L'Oréal to buy, raises price target
L'Oréal shares are seeing significant interest on the Paris Bourse (+1.36% to 389.85 euros) and could be heading for a fifth consecutive session of gains, having already climbed 7.34% over the last four days. On Thursday, the stock is being supported by a rating upgrade from Berenberg.
In a research note, the German private and investment bank suggests that the group's growth is reaching an inflection point this year. It notes that while the company is returning to its organic growth levels, the share price has yet to reflect this recovery.
Analysts also observed that 'bears' continue to shun the consumer staples sector and remain mindful of consumer uncertainty, exacerbated by the conflict in the Middle East, but believe that inflationary pressures will remain manageable. Berenberg further emphasizes that there are no signs suggesting a deterioration in the sector's fundamentals. Sentiment remains positive regarding the continued momentum of the beauty industry, driven notably by younger consumers and the expansion of the middle class in emerging markets.
The German bank noted an acceleration in the global beauty market, which rose from a low of just over 2% in Q1 2025 to 3.8% in Q1 2026. For the current fiscal year, it forecasts market growth of 4%, with L'Oréal expected to outperform by 2 percentage points.
Consequently, analysts have raised their earnings per share forecasts for the world's leading cosmetics company by 2% and upgraded their rating from hold to buy. The 12-month price target has been increased from 374 to 435 euros.
L'Oréal is the world leading cosmetic group. The group offers skincare products (37.2% of net sales), makeup products (19.1%), haircare products (17.5%), fragrances (14.6%), hair colouring products (7.6%) and other (4%). Net sales break down by family of products as follows:
- consumer cosmetics (36.5%): L'Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Essie Niely, Dark and Lovely, Mixa, MG and Carol's Daughter brands;
- luxury cosmetics (35.4%): 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 (16.4%): La Roche-Posay, Vichy, CeraVe, SkinCeuticals, Skinbetter Science, etc.;
- professional products (11.7%): 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 2025, L'Oréal has 37 production sites worldwide.
Net sales are distributed geographically as follows: France (7.3%), Europe (26.5%), North America (26.6%), North Asia (22.9%), Asia/Pacific/Middle East/Africa (9.3%) and Latin America (7.4%).
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