L'Oréal (+0.37%, at 388.75 euros) is posting a slight gain within the CAC 40, following a favorable note from Barclays published yesterday. The British bank upgraded its recommendation from underweight to overweight, raising its price target from 325 to 435 euros. "L'Oréal should grow 1.3 to 1.4 times faster than the market average thanks to a significant intensification of its innovation efforts as part of its Beauty Stimulus plan," Barclays explained to justify its decision.

In other words, the owner of the Garnier brand can continue to outperform the market.

"After a challenging 2025 for the cosmetics market, the fourth quarter should be stronger, with tentative signs of recovery in the American and Chinese markets. We estimate this market could rebound with growth of 4 to 4.5% in 2026," Barclays also noted. This environment will benefit L'Oréal, a giant in the sector.

Growth Acceleration Starting in 2026

In this note, Barclays says it is "impressed by the power of this plan designed to stimulate growth in the second half of 2025, which looks even more robust in 2026. Early signs of recovery in North America and North Asia suggest a more favorable market environment for the group's key categories."

Based on this, the analyst raised its organic growth forecast for 2026 from 5% to 5.6%.

According to Barclays, the world's number one cosmetics company has prepared for its reacceleration in 2026 thanks to two major levers: the integration of high-potential acquisitions (Color Wow, Kering Beauté) and investment in new market segments.

"L'Oréal achieves the highest score on our FMCG Scorecard* with 94 points out of 100, earning top marks in 9 out of 10 categories," the bank also reported.
*(Editor's note: Fast-Moving Consumer Goods. This is a comparative tool that places L'Oréal at the top of the pyramid ahead of competitors like Estée Lauder, Unilever, and Coty).

Barclays' optimistic outlook contrasts with L'Oréal's mixed sales performance in the third quarter of 2025.

Last October, the world's leading cosmetics company announced weaker-than-expected revenue growth for the third quarter of 2025. It rose by 4.2% on a like-for-like basis and by 0.5% as reported, reaching 10.33 billion euros. Internal growth was slightly below the Visible Alpha consensus of 4.7%.

"The slight disappointment in this publication comes from the Luxe division," explained Invest Securities. In this third quarter, this business segment posted like-for-like growth of 2.5%, below the 6% consensus.

"All geographic regions progressed: the recovery of our two largest markets – the United States and mainland China – continued. In a solid market, Europe remained robust, and continued momentum in SAPMENA-SSA more than offset weakness in Latin America," commented Nicolas Hieronimus, CEO of L'Oréal, regarding third-quarter sales.

On February 12, L'Oréal will present its 2025 full-year results after the close of the Paris Stock Exchange.