JPMorgan lowers L’Oreal stock price target to EUR350 on slower growth

Investing.com - JPMorgan has reduced its price target on L’Oreal SA (EPA:OR) (OTC:LRLCY) to EUR350.00 from EUR360.00 while maintaining a Neutral rating on the stock. The beauty giant, currently trading at $89 with a market capitalization of $234.61 billion, has delivered a strong year-to-date return of 28.29%.

The firm expects L’Oreal to deliver stronger second-half performance driven by resilient U.S. demand and planned innovations, despite a slower global beauty market. JPMorgan forecasts Q3 2025 growth at 4.0%, below the consensus estimate of 4.7%.

The bank does not anticipate significant improvement in the demand environment for 2026, leading it to lower its fiscal year 2026 like-for-like growth forecast to 3.6% from 4.3% previously. This reduction reflects expectations of weaker performance in fragrances and only a modest recovery in the skin care segment.

JPMorgan maintains its earnings per share estimate for 2025 but has reduced its 2026 EPS forecast by approximately 2%, placing it 1% to 4% below consensus estimates. The adjustment accounts for weaker portfolio mix, tariff impacts, and a strong Euro, which are expected to limit margin improvement.

The firm notes that L’Oreal’s valuation remains high at 29x price-to-earnings for 2026 and 17.5x EV/EBITDA for 2026 (both excluding Sanofi), representing approximately an 80% premium to European peers while the growth gap narrows.

In other recent news, L’Oreal has been the focus of several analyst updates and market evaluations. The company’s stock rating was upgraded by JPMorgan, which moved it from Underweight to Neutral and increased the price target to EUR360.00. This upgrade was influenced by an improved outlook for the US market and L’Oreal’s management expressing confidence in a 4% growth of the global beauty market for the fiscal year 2025. Meanwhile, Barclays downgraded L’Oreal’s rating from Overweight to Underweight, citing concerns about the company’s declining market outperformance in 2024 compared to its historical averages. Barclays adjusted its price target for L’Oreal to EUR325.00 from EUR384.00. Additionally, Bernstein reiterated a Market Perform rating on L’Oreal, emphasizing the strength of its dermatological division and consistent market share gains over the past decade. These developments reflect differing perspectives on L’Oreal’s market position and future growth potential.

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