# L'Oréal (EPA:OR)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/EPA/OR

Price €449.80 (EUR), market cap €239.5B, Consumer Staples - Household & Personal Products.

## Valuation

- SE Reference Value (expected value, DCF): €376.02 (central 50% range €320.87 to €456.00), -16% against the price; range width narrow
- SE Grade: 2 of 3 (Value 0, Quality 3, Moat 3)
- Consensus Rating: Buy (Strong buy 11, Buy 4, Hold 7, Sell 1, Strong sell 1)
- Consensus Price (mean): €433.72, -4% against the price

## Key metrics

Financials in EUR. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | €45.35B | CAGR 9.5% | CAGR 6.5% | P80 |
| Revenue growth | 3.5% | 7.6% | 5.6% | P53 |
| Gross margin | 74.4% | 73.9% | 73.0% | P87 |
| Operating margin | 20.3% | 19.8% | 18.8% | P50 |
| Net margin | 13.9% | 14.7% | 14.1% | P50 |
| FCF yield | 3.1% | 2.8% | 3.6% | P13 |
| FCF margin | 16.6% | 15.3% | 15.2% | P57 |
| FCF / net income | 1.20x | 1.04x | 1.09x | P60 |
| ROIC | 16.3% | 18.6% | 16.7% | P50 |
| ROE | 19.4% | 20.6% | 16.3% | P54 |
| ROA | 9.5% | 11.4% | 10.1% | P67 |
| EPS | €11.79 | CAGR 12.5% | CAGR 8.5% | - |
| EPS growth | 3.2% | 8.5% | 8.5% | P38 |
| Book value per share | €63.29 | CAGR 4.8% | CAGR 4.6% | - |
| FCF per share | €14.11 | CAGR 6.5% | CAGR 9.4% | - |
| Dividend per share | €7.49 | CAGR 12.5% | CAGR 9.1% | - |
| Dividend yield | 1.7% | 1.7% | 1.7% | P14 |
| Payout ratio | 63.5% | 58.5% | 58.1% | P41 |
| Diluted shares | 532.4M | CAGR -1.0% | CAGR -0.6% | P40 |
| Buyback yield | 0.1% | 0.2% | 0.2% | P40 |
| Debt/equity | 0.49x | 0.27x | 0.15x | P64 |
| Enterprise value | €246.4B | CAGR 6.3% | CAGR 9.0% | P87 |
| Long-term debt | €11.72B | CAGR 48.6% | CAGR 88.8% | P53 |

## Company Note (H1 2026)

Written by AI from the data above.

**L'Oréal's third quarter leaned** on travel and sunshine. Hainan travel retail was very positive while Mainland China stayed a bit negative, and a very good summer sun season lifted La Roche-Posay and CeraVe sun care. Mexico was the soft spot, where makeup inventory gaps from a warehouse IT transition and customer pricing swings hurt sales. That follows a first half in which revenue rose 5.8%, below the 9.5% five-year compound rate. Strong franchises do not cover the price: SE fair value of €376 is 16.4% below the price.

**Management expects the beauty market** to grow about 5% in the fourth quarter, with regional differences. It says L'Oréal will keep outperforming that market, though at a slightly more moderate rate. The CEO was firm: "We will deliver on a full-year basis the promised acceleration of our top-line growth versus last year, significantly." Strategy includes taking Mixa beyond Europe and speeding Dr.G's U.S. launch. Analysts pressed on whether North Asia can accelerate again, and management pointed to tougher comparisons. On margins, it said discipline is not the priority and it would rather fuel growth.

**Consensus already expects acceleration**. Analysts forecast EPS growth of 8.5% for FY2026 and 10.4% for FY2027, on FY2026 revenue growth of 8.2%. That fits management's call for faster sales, but the price asks for more. It implies revenue growth of 9.6% a year over five years, above the 8.2% consensus for FY2026, and that is a demanding bar for a company that beat in 0 of the last 2 quarters on record. Even a full delivery on guidance leaves little room for any shortfall.

**Margins are improving** while returns are slipping. Gross margin of 74.4% is in line with its five-year median, up 1.9 points over three years and at the 90th percentile of the closest peers by size. FCF margin rose from 12.9% in FY2022 to 16.3% in FY2025. Returns moved the other way. ROE fell from 22.5% to 18.0% over the same years, and ROIC eased from 19.5% to 17.2%. Those falling returns are the weak spot in an otherwise strong quality record.

Debt/equity of 0.49x is 85% above its five-year median, and that extra leverage comes as returns soften. P/E of 38.1x sits above its 10-year median of 32.9x. SE fair value of €376 is 16.4% below the price, held with high confidence. The analyst average target of €434 is 3.6% below it. For the price to hold, revenue must compound well beyond what companies this large usually manage. If half-year growth slips back toward the low single digits, the price no longer has that support.

**The SE Score** is 2 of 3. Quality earns three stars because ROIC of 18% sits well above an 8.5% cost of capital, and interest cover is a comfortable 20.7 times. Moat also earns three stars: ROIC has topped 15% in 8 of the last 10 years and gross margin has stayed stable. Value earns no stars, since the price stands above SE fair value, which left the business tier unchanged. The overall score comes down from 3 because the five-year return over the hurdle ranks below the top 5% of companies.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology