L'Oréal S.A. (EPA:OR) Just Reported Half-Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for L'Oréal S.A. (EPA:OR) shareholders, because the company has just released its latest half-year results, and the shares gained 4.2% to €389. Results were roughly in line with estimates, with revenues of €22b and statutory earnings per share of €11.95. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on L'Oréal after the latest results.

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Following last week's earnings report, L'Oréal's 22 analysts are forecasting 2025 revenues to be €44.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 8.9% to €12.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of €44.5b and earnings per share (EPS) of €12.46 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for L'Oréal

The analysts reconfirmed their price target of €387, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on L'Oréal, with the most bullish analyst valuing it at €430 and the most bearish at €325 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that L'Oréal's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.8% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that L'Oréal is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on L'Oréal. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for L'Oréal going out to 2027, and you can see them free on our platform here..

It might also be worth considering whether L'Oréal's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.