L'OREAL (OR.PA) Stock Fundamental Analysis
Europe - Euronext Paris - EPA:OR - FR0000120321 - Common Stock
378.375 EUR
-1.62 (-0.43%)
We assign a fundamental rating of 6 out of 10 to OR. OR was compared to 13 industry peers in the Personal Care Products industry. OR has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. OR has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- OR had positive earnings in the past year.
- OR had a positive operating cash flow in the past year.
- In the past 5 years OR has always been profitable.
- In the past 5 years OR always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 11.21%, OR belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
- OR's Return On Equity of 19.63% is fine compared to the rest of the industry. OR outperforms 76.92% of its industry peers.
- OR's Return On Invested Capital of 17.45% is amongst the best of the industry. OR outperforms 92.31% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for OR is above the industry average of 11.91%.
- The last Return On Invested Capital (17.45%) for OR is above the 3 year average (16.33%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.21% | ||
| ROE | 19.63% | ||
| ROIC | 17.45% |
ROA(3y)11.83%
ROA(5y)10.87%
ROE(3y)20.54%
ROE(5y)18.68%
ROIC(3y)16.33%
ROIC(5y)15.46%
1.3 Margins
- OR has a Profit Margin of 13.96%. This is amongst the best in the industry. OR outperforms 92.31% of its industry peers.
- OR's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 20.41%, OR belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
- OR's Operating Margin has been stable in the last couple of years.
- Looking at the Gross Margin, with a value of 74.11%, OR belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
- OR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.41% | ||
| PM (TTM) | 13.96% | ||
| GM | 74.11% |
OM growth 3Y1.46%
OM growth 5Y1.47%
PM growth 3Y1.16%
PM growth 5Y3.26%
GM growth 3Y0.14%
GM growth 5Y0.32%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so OR is creating value.
- The number of shares outstanding for OR remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, OR has less shares outstanding
- The debt/assets ratio for OR has been reduced compared to a year ago.
2.2 Solvency
- OR has an Altman-Z score of 7.17. This indicates that OR is financially healthy and has little risk of bankruptcy at the moment.
- OR's Altman-Z score of 7.17 is amongst the best of the industry. OR outperforms 92.31% of its industry peers.
- The Debt to FCF ratio of OR is 1.19, which is an excellent value as it means it would take OR, only 1.19 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 1.19, OR belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
- A Debt/Equity ratio of 0.20 indicates that OR is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.20, OR belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.19 | ||
| Altman-Z | 7.17 |
ROIC/WACC2.18
WACC8.01%
2.3 Liquidity
- A Current Ratio of 1.19 indicates that OR should not have too much problems paying its short term obligations.
- The Current ratio of OR (1.19) is comparable to the rest of the industry.
- A Quick Ratio of 0.90 indicates that OR may have some problems paying its short term obligations.
- With a decent Quick ratio value of 0.90, OR is doing good in the industry, outperforming 61.54% of the companies in the same industry.
- The current and quick ratio evaluation for OR is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 3.41% over the past year.
- OR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.34% yearly.
- Looking at the last year, OR shows a small growth in Revenue. The Revenue has grown by 2.60% in the last year.
- OR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.80% yearly.
EPS 1Y (TTM)3.41%
EPS 3Y12.8%
EPS 5Y10.34%
EPS Q2Q%1.29%
Revenue 1Y (TTM)2.6%
Revenue growth 3Y10.44%
Revenue growth 5Y7.8%
Sales Q2Q%1.59%
3.2 Future
- The Earnings Per Share is expected to grow by 7.87% on average over the next years.
- OR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.00% yearly.
EPS Next Y3.87%
EPS Next 2Y5.36%
EPS Next 3Y6.02%
EPS Next 5Y7.87%
Revenue Next Year2.05%
Revenue Next 2Y3.12%
Revenue Next 3Y3.86%
Revenue Next 5Y5%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 29.68 indicates a quite expensive valuation of OR.
- OR's Price/Earnings ratio is a bit more expensive when compared to the industry. OR is more expensive than 61.54% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.82. OR is around the same levels.
- OR is valuated quite expensively with a Price/Forward Earnings ratio of 26.92.
- Based on the Price/Forward Earnings ratio, OR is valued a bit more expensive than the industry average as 69.23% of the companies are valued more cheaply.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. OR is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.68 | ||
| Fwd PE | 26.92 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, OR is valued a bit more expensive than 76.92% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of OR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.3 | ||
| EV/EBITDA | 18.98 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates OR does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of OR may justify a higher PE ratio.
PEG (NY)7.66
PEG (5Y)2.87
EPS Next 2Y5.36%
EPS Next 3Y6.02%
5. Dividend
5.1 Amount
- OR has a Yearly Dividend Yield of 1.81%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.23, OR pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, OR has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
5.2 History
- On average, the dividend of OR grows each year by 11.22%, which is quite nice.
Dividend Growth(5Y)11.22%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- 62.89% of the earnings are spent on dividend by OR. This is not a sustainable payout ratio.
- The dividend of OR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP62.89%
EPS Next 2Y5.36%
EPS Next 3Y6.02%
L'OREAL / OR.PA FAQ
What is the ChartMill fundamental rating of L'OREAL (OR.PA) stock?
ChartMill assigns a fundamental rating of 6 / 10 to OR.PA.
What is the valuation status of L'OREAL (OR.PA) stock?
ChartMill assigns a valuation rating of 2 / 10 to L'OREAL (OR.PA). This can be considered as Overvalued.
How profitable is L'OREAL (OR.PA) stock?
L'OREAL (OR.PA) has a profitability rating of 9 / 10.
Can you provide the financial health for OR stock?
The financial health rating of L'OREAL (OR.PA) is 9 / 10.
What is the expected EPS growth for L'OREAL (OR.PA) stock?
The Earnings per Share (EPS) of L'OREAL (OR.PA) is expected to grow by 3.87% in the next year.