LRLCF - L'Oréal: Further Recovery In Q4 Pushing Shares To New Records
- L'Oréal shares hit a new record high this week, but we believe they can still provide a high-single-digit annualized return in the next 4 years.
- Against a pre-COVID prior year, sales grew 4.8% organically in Q4; including FX, H2 sales were 1.0% down but EBIT was 7.2% higher.
- L'Oréal has continued to gain share and grow faster than the market; margins were protected by cost cuts and flat year on year.
- The Beauty market is expected to grow in H1 2021; L'Oréal is guiding to continuing share gain and both sales and profit growing in 2021.
- With shares at €321.10, we expect an exit price of €411 and a total return of 28% (6.9% annualized) in 4 years. Buy.
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L'Oréal: Further Recovery In Q4 Pushing Shares To New Records