Sustaining a top position in the beauty market - adapting l´oréal´s winning formula

• Autor(a) principal: Branco, Inês Casquinha David
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/145342
• topic: Valuation; Finance; Beauty; L´Oréal; Digital revolution; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The present paper is an Equity Research for L’Oréal, S.A., the top cosmetics company in the world. The main purpose is to establish a BUY, HOLD or SELL recommendation on the share price of the company. This recommendation is given based on the comparison of the current share price and the share price calculated through the discounted cash flow (DCF) method. To further support this valuation a multiples analysis was also performed. Both methods include extensive analysis on the beauty market, L’Oréal and its peers. Moreover, several sensitivity analysis were computed to evaluate the extension of exposure the yielded share price had to those variables/inputs. The analysts provide a final recommendation to BUY L’Oréal’s stock, as its current share price is inferior to the DCF target price of 462.39 € as of 31stDecember 2022. This assumes a dividend of 4€ per share the same year and a total shareholder return of 14.83%.