Analysts Are Updating Their L'Oréal S.A. (EPA:OR) Estimates After Its Yearly Results

L'Oréal S.A. (EPA:OR) shareholders are probably feeling a little disappointed, since its shares fell 6.4% to €419 in the week after its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of €41b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.2% to hit €11.52 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for L'Oréal

Taking into account the latest results, the current consensus from L'Oréal's 18 analysts is for revenues of €44.5b in 2024. This would reflect a satisfactory 7.9% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 10% to €12.76. In the lead-up to this report, the analysts had been modelling revenues of €44.5b and earnings per share (EPS) of €12.91 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at €430. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on L'Oréal, with the most bullish analyst valuing it at €525 and the most bearish at €320 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of L'Oréal'shistorical trends, as the 7.9% annualised revenue growth to the end of 2024 is roughly in line with the 9.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.4% per year. So it's pretty clear that L'Oréal is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at €430, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for L'Oréal going out to 2026, and you can see them free on our platform here.

You can also see whether L'Oréal is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.