Berenberg announced on Tuesday that it had raised its recommendation on L'Oréal shares from "hold" to "buy", with a price target raised from 436 to 530 euros, representing a potential upside of 18%.

In a research note, the intermediary backs up its favorable recommendation with the prospect of average annual organic growth of 6.7% over the period 2025-2030, which would make it the best performer among the consumer staples stocks it monitors.

The analyst also forecasts an average return to shareholders of 11.3% over the next six years, taking into account both earnings per share (EPS) growth and dividend yield.

Finally, Berenberg believes that the cosmetics group's highly cash-generative business model points to future share buybacks, and even possible mergers and acquisitions (M&A).

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