L'Oréal managed to regain momentum on Monday after its sharp fall on Friday, buoyed by reassuring analyst comments that helped put the French cosmetics giant's Q4 2025 underperformance into perspective.

The stock rebounded by 3.3%, marking the strongest rise on the CAC 40 index and one of the biggest gains on the pan-European STOXX Europe 600.

In doing so, the share erased a significant portion of its fall of nearly 5% on Friday, following the announcement of "only" 6% organic growth in Q4—just short of analysts' expectations of 6.3%, and below the "unofficial" consensus of 7%.

This disappointment was mainly linked to a slowdown in growth for its luxury products (Lancôme, Yves Saint Laurent, Aesop, and Maison Margiela) and the persistent weakness of its business in China, where the environment remains challenging, even if there are signs of slight improvement.

"The debate mainly focuses on the pace of recovery in China, where the fourth quarter disappointed but the first quarter appears to have started well," Deutsche Bank analysts noted this morning.

"It will likely be necessary to wait for first-quarter results from the major luxury players to truly understand how the situation will evolve," the German bank added.

Beyond the disappointing Q4 results, many investors prefer to focus on the encouraging signs of a rapid improvement in the beauty specialist's performance, anticipating a certain revaluation of the stock as these temporary adverse factors recede.

While UBS teams lament a "missed opportunity" with the latest results presentation, they also assure that the "dust should settle quickly."

"Rather than significantly outperforming expectations and convincingly demonstrating it had turned a corner—with an acceleration in growth—L'Oréal found itself caught by unfavorable one-off factors (notably unexpected destocking in Asia's 'travel retail' sector or the timing gap between deliveries and final sales in the United States), which overshadowed the company's underlying progress," commented Guillaume Delmas, UBS equity specialist, this morning.

He says that the market should soon set aside the disappointing results of the past two quarters and focus more on the numerous strengths that define the company.

In its research note, amongst other things, UBS highlights: (1) the group's broad-based improvement in like-for-like growth, (2) a recovery in its main growth drivers, (3) a strong start to the year supporting the group's ambition to accelerate growth in 2026, (4) the prospect of numerous acquisitions offering synergy opportunities, (5) its pioneering status in AI among leading beauty sector stocks, positioning it as a clear winner in the ongoing technological revolution, and (6) an attractive valuation.

While the stock currently trades at a 2026 P/E of 27.5x—a 35% premium to the broader European consumer staples sector (20x)—UBS notes that its P/E remains well below its ten-year average of 30.5x.

Following today's rise, the share is now up 3.3% year-to-date, compared with a 2.2% gain for the CAC 40.

Over the past 12 months, it is still up 11.5%, versus a 1.9% increase for the CAC.

In technical terms, L'Oréal is poised to fill its "pullback" below the €385 threshold that followed Thursday evening's results release and remains comfortably above its 100- and 200-day moving averages, at €373.5 and €376 respectively, signaling a still-solid stock market momentum.