LRLCF - L'Oréal: Upgrade To Buy After 22% Correction From Peak
- We are upgrading our rating on L'Oréal, after shares fell 22% from their peak, back to 5% below the level at our previous downgrade.
- With structural market growth in Beauty, L'Oréal sales growing faster than market and margins expanding, we expect an EPS CAGR near 10%.
- 2021 results showed continuing strong operational performance, with broad-based growth across segments and regions.
- With L'Oréal shares at €338.20, we expect an exit price of €469 and a total return of 46% (10.6% annualized) by 2025 year-end. Buy.
- Within Beauty, Estée Lauder shares are even more attractive, as their P/E is slightly lower even though their EPS is expected to grow faster.
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L'Oréal: Upgrade To Buy After 22% Correction From Peak