LOréal S.A.
🇫🇷 OR.PA · Paris · FR0000120321
Consumer
EUR 358.20 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
31.3
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 358.20 ÷ 11.44 = 31.3
TTM period through: 2025-12-31
Forward P/E (estimated): 26.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 31.3
Yield (Fwd)
2.01%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.02%
Net Debt/EBITDA (TTM)
0.2x
Latest quarter: 0.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 0.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 63.9%
Cash Flow Payout (TTM): 45.2%
FCF Coverage (TTM): 1.83x
ROE
18.0%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
18.0x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
L'Oréal is the undisputed global leader in the beauty industry, boasting a wide economic moat, exceptional operating margins, and a pristine balance sheet. While the company offers outstanding long-term fundamentals and a highly secure growing dividend, the current valuation around €358 (P/E 31.3) offers limited upside and a low yield. Existing shareholders should maintain positions given the phenomenal business quality, but new investors should wait for a significant market correction to provide a better entry point.
Sector Context
L'Oréal operates globally in the consumer goods sector, specifically dominating the beauty and personal care industry through a diverse portfolio of luxury, professional, and mass-market brands. While not a traditional regulated utility, its strong brand loyalty and essential nature of personal care routines provide highly reliable, recurring cash flows akin to consumer staples, though these attributes typically command a significant market premium.
📊 Strategy Analysis
- • Pristine balance sheet with Net Debt/EBITDA of 0.19x, indicating exceptionally low financial risk and strong financial flexibility.
- • Wide economic moat and global brand dominance, driving strong profitability with a 20.1% EBIT margin and 18.0% ROE.
- • Highly secure and growing dividend backed by a conservative 45.2% cash flow payout ratio and a consistent 9.4% long-term CAGR.
⚠ What to Watch
- • Current P/E of 31.30x significantly exceeds the optimal 8-15x target range, representing a steep premium for dividend value investors.
- • The 2.02% dividend yield falls well below the strategy's minimum 3% threshold required for initiating new income-focused positions.
- • Current valuation leaves no margin of safety, trading far above typical value metrics despite recent broader geopolitical market volatility.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.