UBS: Q3 'Critical' for L'Oreal to Show Consistent 6% Growth

02:51 AM EDT, 10/12/2026 (MT Newswires) -- UBS Global Research believes L'Oréal's (OR.PA) third quarter is a "critical" period for the French cosmetics and personal care products group to prove it can sustain a 6% growth rate, following a first-half beat largely seen as being supported by favorable comparisons. "As such, maintaining a c. 6% pace in Q3, against the toughest comparator of the year, would cement the idea that the combination of AI, digital and several favorable megatrends (such as a more health conscious consumer, longevity, well-being, rapid rise of affluent consumers in emerging markets etc) should structurally drive higher industry growth and strengthen L'Oréal's outperformance - group's CMD in Paris (Nov 30th/ Dec 1st) to provide more granularity on this," according to a third-quarter preview note focused on the European food and home personal care industries. Ahead of L'Oréal's third-quarter results due Oct. 22, the research firm projects an adjusted like-for-like sales growth of 5.9%, above the Vara consensus of 5.38% and below the previous quarter's 6.3% due to 130 basis points higher comparisons for the three months ended Sept. 30. Analysts said their expectations are bolstered by a beauty sector that maintained a 5% broad-based growth in the summer, alongside L'Oréal's projected top-line growth of at least 1.2 times the market rate, after a 1.4-time beat in the first half. "As has been the case in the past couple of years, L'Oréal's reported LFL sales growth will reflect the impact from the group's IT transformation; for now, we simply assume in our numbers a reversal of last year's 90bps headwind (as in reported LFL of +6.8% in Q3 2026)," the note said. UBS rates the stock at buy.