L'Oreal Spotlights E-Commerce, Portfolio At Chinese Event

L’Oreal Co. LRLCY presented updates and growth projections at company meetings in Shanghai this month.

The Analyst

Raymond James analyst Marion Boucheron reiterated an Outperform rating  on L'Oreal with a price target of 222 euros ($252.63). 

The Thesis

The personal care and cosmetics retailer's complex and exciting portfolio became apparent during the Capital Market Days, Boucheron said in a Thursday note.

L'Oreal has an ability to leverage its global portfolio, adapt to local demand and take advantage of new technology in the sector, the analyst said. 

At the Shanghai meetings, L'Oreal focused on its position in the Chinese beauty market, Boucheron said. 

“In 2016, L’Oréal reached the No. 1 position in China, and it now has a 9.8-percent market share."

The company is well-positioned to expand its Chinese market share in light of its favorable sales mix and a reliance on the fast-growing skincare and makeup sectors, the analyst said. 

L'Oreal's growth opportunities remain substantial and are expected to double by 2030, Boucheron said. 

“The Chinese middle class continues to grow fast, with 150 million people ... expected to enter the middle class between 2015 and 2020. Currently L’Oréal estimates it serves 100 million people and believes the potential could be around 500 million in the midterm.”

Price Action

L’Oreal shares were trading down 0.35 percent at $47.42 at the time of publication Thursday. 

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Photo courtesy of L'Oreal.