The Moat Remains Wide, But L'Oréal's Growth Story Is Narrowing

2025-12-01 10:12:35 ET

When thinking about France, we often think about great food and great wine as well as fashion and luxury. This is not surprising, as the four most valuable companies in France are all companies that are dealing with luxury, fashion, or cosmetics. One of the companies is L’Oréal S.A. ( LRLCF ), and my last article about the company was published in October 2024. In the conclusion of my last article, I wrote:

L’Oréal is certainly a great business and might even be recession-resilient and even perform well during an economic bust. But even when being very optimistic about China returning to growth and L’Oréal continuing to grow with a high pace, the growth rates which are necessary to make the stock fairly valued at this point are just unrealistic and L’Oréal remains a 'Hold' at best.

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