Manufacturing Industry
Even a cosmetic giant is at risk during times of economic uncertainty says Goldman Sachs. (Stock Watch).(L'Oreal S.A.)
Cosmetics International, April, 2003 by Dossin, Jacques-Franck
War is affecting both consumer confidence and traffic in the selective distribution channel. With fears of international terrorism and severe acute respiratory syndrome (Sars) combined with accelerating sector consolidation and rising sector advertising spends, we believe earnings per share (EPS) growth at L'Oreal could be affected over the short-term and put the company's high multiples at risk.
Cautious stance
We believe that L'Oreal's stock could show a weak short-term performance, even if the group's medium-term business model remains quite strong. On top of the likely drop in traffic in department stores and travel-retail sales, sector consolidation and rising advertising spend are new potential risk.
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