UBS: L'Oréal's 'Bold' Strategic Moves Starting to Pay Off; Estimates Revised

11:14 AM EDT, 07/31/2026 (MT Newswires) -- UBS Global Research made changes to its estimates for L'Oréal (OR.PA), highlighting the French cosmetics and personal care products company's better-than-expected like-for-like sales performance in the first six months of 2026. "More importantly, the group's outperformance relative the the [sic] beauty market (which expanded by c. 4.5% in H1) jumped to 1.4x-1.5x compared to the past 2 years average of 1.1x. In our view, this improvement is the direct consequence of several bold strategic choices made over the last couple of years and which are now starting to pay off," analysts said Friday. "We therefore view L'Oréal's new/enhanced winning playbook as positioning the company well for future & sustainable outperformance in a beauty industry that is benefitting from a combination of favourable megatrends which include longevity, strong(er) interest for beauty products from Gen Z consumers and men, and the rapid growth of the upper middle class in emerging markets." With this in mind, the research firm raised its 2026 like-for-like sales growth forecast to 6.1% from 5.6% and lifted its adjusted operating profit estimate by 1%. Meanwhile, the projected EPS was flat due to "slightly" higher dilution from L'Oréal's acquisition of a further 10% stake in Swiss dermatology company Galderma Group (GALD.SW). The stock is rated buy, with a price target of 430 euros.