Fact based stock research
L'Oreal (ENXTPA:OR)

FR0000120321

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

L'Oreal stock research in summary

loreal.comfr

ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), L'Oreal (Personal Products, France) shares have lower financial characteristics compared with similar stocks. Shares of L'Oreal are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives), show below-average growth (Growth Rank of 41), and are riskily financed (Safety Rank of 47), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on L'Oreal's financial characteristics. As the company L'Oreal's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 8), low growth (Obermatt Growth Rank of 41), and risky financing practices (Obermatt Safety Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	8
Growth Rank	41
Safety Rank	47
Combined Rank	9

Country	France
Industry	Personal Products
Index	EURO STOXX 50, CAC 40, CAC All, SBF 120, Diversity Europe, Human Rights, Sound Pay Europe
Size class	XX-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: L'Oreal

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	31	13	8
GROWTH
GROWTH	64	81	83	41
SAFETY
SAFETY	89	70	70	47
SENTIMENT
SENTIMENT	n/a	39	89	^new
360° VIEW
360° VIEW	n/a	65	92	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better L'Oreal is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	31	13	8
GROWTH
GROWTH	64	81	83	41
SAFETY
SAFETY	89	70	70	47
COMBINED
COMBINED	33	70	66	9

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of L'Oreal the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), L'Oreal shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for L'Oreal. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than 85% of comparable companies, indicating a low value concerning L'Oreal's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 17 which means that the stock price compared with what market professionals expect for future profit levels is higher than 83% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 6 is also low. Compared with invested capital, the stock price is higher than for 94% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on L'Oreal's stock price compared with the company's operational size and dividend yields. Should dividend investors pick L'Oreal? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose L'Oreal only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	9	27	15	15
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	45	17	11	17
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	36	15	8	6
DIVIDEND YIELD
DIVIDEND YIELD	56	58	55	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	9	31	13	8

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of L'Oreal; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), L'Oreal shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for L'Oreal. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Capital Growth is also above 38% of competitors with a rank of 67. But Profit Growth only has a rank of 38, which means that currently professionals expect the company to grow its profits less than 62% of its competitors. And Stock Returns have also been below average with a rank of only 21. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	54	63	58	51
PROFIT GROWTH
PROFIT GROWTH	71	43	62	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	83	54	67
STOCK RETURNS
STOCK RETURNS	76	79	87	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	64	81	83	41

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of L'Oreal.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company L'Oreal has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of L'Oreal is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for L'Oreal. Leverage is at a rank of 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Liquidity is also good at a rank of 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 10, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 47 (worse than 53% compared with alternatives), L'Oreal has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for L'Oreal. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with L'Oreal and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	82	71	74	62
REFINANCING
REFINANCING	36	10	11	10
LIQUIDITY
LIQUIDITY	93	88	94	88
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	89	70	70	47

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of L'Oreal and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	26	29	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	49	52	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	41	86	^new
MARKET PULSE
MARKET PULSE	n/a	62	94	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	39	89	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for L'Oreal.
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