EUR/USD likely to find a peak near 1.25: UBS
Investing.com -- UBS said L’Oréal’s performance continues to stand out in the beauty sector, even as peers struggle with weaker sales outlooks.
The brokerage noted that Estée Lauder and Coty (NYSE:COTY) both issued cautious guidance for the coming fiscal year, citing continued pressure in travel retail, softness in China and the United States, and retailer inventory adjustments.
By contrast, L’Oréal has maintained steady execution and is expected to accelerate new product launches in the second half of the year.
L’Oréal’s Luxe Division, which accounts for 37% of its turnover, alongside fragrances and make-up representing 13% and 20% of sales respectively, has proven more resilient than rivals’ comparable segments.
UBS flagged that while Estée Lauder expects only 0% to 3% organic sales growth in fiscal 2026 and Coty anticipates sales declines until early 2026, L’Oréal is outperforming both in terms of organic sales growth and market execution.
Financially, UBS projects that L’Oréal will deliver revenues of €44 billion in 2025 and €45.6 billion in 2026, with an operating margin expanding gradually from 20.2% in 2025 to 20.5% in 2026.
Earnings per share are estimated at €12.63 in 2025, rising to €13.53 in 2026. The group’s net earnings are forecast at €6.8 billion in 2025 and €7.2 billion in 2026. Dividend per share is expected to increase from €7.35 in 2025 to €7.91 in 2026.
UBS underlined that the broader beauty sector is becoming more volatile and unpredictable, with intensifying competition and retailer inventory swings contributing to uneven performances.
Still, L’Oréal’s consistent delivery and financial resilience stand out against this softer industry backdrop.