Equity valuation: L'Oréal S.A.

• Autor(a) principal: Carrapo, Carolina Delca
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/28286
• topic: Business valuation; Cosmetics; L'Oréal; Discounted cash flow method; Relative valuation; Avaliação de empresas -- Business valuation; Cosméticos; L’Oréal; Método dos fluxos de caixa descontados; Avaliação relativa

L'Oréal, founded by Eugéne Schueller in 1939, is the leading company in the cosmetics market. With the purpose of "Creating the beauty that moves the world" it has, over the years, gained the trust of consumers by seeking to create and offer products that stand out in terms of quality and effectiveness. L'Oréal's management has demonstrated its management skills by overcoming potential crises, as was the case with the COVID-19 pandemic, when L'Oréal reaffirmed its position as the sales leader in the market. This master's project thus aims to determine the fair value of L'Oréal's shares. In the end, the result obtained will consist of a statement for investors on whether to buy, sell or hold L'Oréal's shares, based on the potential appreciation or devaluation in relation to the market price. After reviewing what has been done in the financial world on corporate valuations, two methods will be applied in the analysis of L'Oréal. Free Cash Flow to the Firm will be the first method to be applied. Next, we will apply the Relative Valuation that will enable us to compare the results obtained in the two methods to arrive at a more precise final recommendation. L'Oréal, a company listed on Euronext Paris, had a value per share of 416.95 euros on December 31, 2021. After the analysis performed, this price was found to be undervalued, so our final recommendation is that investors buy L'Oréal shares.