Deutsche Bank reiterated a bullish stance on L'Oréal S.A. ( OTCPK:LRLCF ) on its view the personal care giant will be a relative outperformer in the tough macro atmosphere.
Analyst Tom Sykes and team pointed to better balance and sees L'Oreal as a beneficiary of China credit growth.
"We don't view L'Oreal as the most defensive Staples company albeit that the balance of the company is better than prior to the GFC. That being said we still expect L'Oreal's earnings to outperform the market in a downturn and we expect the share to outperform until the forecasts for more cyclical companies reflect the increasing risk of a downturn and until key labour markets have shown some underperformance."
L'Oreal ( OTCPK:LRLCF ) reported strong sales growth for the first half of 2022 and saw net profit jump 25% with consumers snapping up beauty products once again following the pandemic.
Shares of L'Oreal ( OTCPK:LRLCF ) are down almost 26% on a year-to-date basis.
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L'Oreal is tipped by Deutsche Bank to outperform in an economic downturn