(News Bulletin 247) – Bernstein’s analysts downgraded their opinion on L’Oréal shares on Thursday, reducing them from ‘outperformance’ to ‘performance in line with the market’, with a price target raised from 400 to 445 euros.
In a sector note, the research department justifies its decision by the 31.5% surge in the share price since the start of the year, an increase which, according to him, has brought it back to a level close to the valuation model that he established on the title.
More generally, Bernstein believes that the European FMCG sector is currently overvalued by 10%, while the economic outlook does not show any potential for revaluation.
According to analysts, L’Oréal remains one of the best companies in the sector, and one of the strategic stocks to hold alongside Beiersdorf, Lindt and Nestlé, but they believe that they are not in a position to recommend investors to further increase their positions given the current environment.
If they recognize that the organic growth of the group could still surprise on the rise (+13% in the first quarter, and without the help of China), the professionals also consider that the title remains vulnerable to a possible surge in bond yields .
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