Deutsche Bank analysts recommend selling L'Oreal shares

Shares of European luxury goods groups fell on September 12 after L’Oreal was downgraded by Deutsche Bank to sell, Report informs referring to MarketWatch.

Analysts at the German bank led by Tom Sykes said L’Oreal was “in many ways a unique company…a top-notch marketer, [and] the company is also highly innovative with attractive gross margins and profitability.”

However, it is exposed to a slowing China in the medium term and softer demand for the group’s dermatological beauty brands, Deutsche added. “The downside risk to the premium multiple that a slower China and dermatological beauty would pose, alongside macro concerns is now considerable, in our view.”

Deutsche moved its recommendation from hold to sell, with its price target falling from 385 euros to 350 euros.