Beauty

Ten key magnificence gamers – MarketScreener


The global beauty industry, with average annual growth of 5%, continues to captivate investors thanks to its consistent performance. This growth is underpinned by factors such as increasing demand for skincare products, which has outstripped make-up, and a growing trend towards increasingly high-end products. Despite economic challenges such as inflation, the sector has shown remarkable resilience, with growth of 8% in 2023. Analysts expect this positive trend to continue, making the beauty market an attractive investment for years to come. These are 10 of the biggest beauty players:

  • L’Oréal, the undisputed beauty leader

L’Oréal, the world’s leading cosmetics group and headliner of this list of 10 stocks in the beauty sector, stands out for its business model based on innovation and product diversification. Founded in 1909, the French company has evolved to meet the changing needs of its global customer base, offering a wide range of products from skincare and make-up to fragrances and hair care products. L’Oréal offers an impressive variety of products across several categories. Skin care accounts for the largest share of sales, closely followed by make-up, hair care, fragrances and hair color.


It markets its products under different brands, each targeting specific market segments:

  • Consumer Products: Including brands such as L’Oréal Paris, Garnier and Maybelline, which are sold mainly via mass-market channels.

  • Luxury Products: Including high-end brands such as Lancôme and Giorgio Armani Beauty, distributed via selective channels.

  • Active Cosmetics: Including dermatological brands such as La Roche-Posay and Vichy, available mainly through pharmacies.

  • Professional Products: Aimed at hair salons, with brands such as L’Oréal Professionnel and Kérastase.

The company serves a diverse global customer base, with operations in several key regions. Europe accounts for the largest share of sales, followed by North America and North Asia. The company has succeeded in maintaining robust growth in these regions despite various economic challenges. The year 2023 was exceptional for L’Oréal, with sales up 11% to 41.18 billion euros. Operating margin also reached a record 19.8%. This performance is the result of an effective strategy focused on innovation and adaptation to consumer preferences. The French leader continues to dominate the global beauty market, thanks to a well-balanced strategy combining innovation, product diversification and geographic expansion. With ongoing investment in research and development, and a deep understanding of customer needs, the company is well positioned for continued growth in the years ahead. Beware, however, as many more or less niche brands are launched every year. The real challenge for L’Oréal will be to maintain its market share in this bubbling universe.

  • Beiersdorf adopts a diversified strategy

L’Oréal‘s competitor on the other side of the Rhine, Beiersdorf, has had a less glittering career than its peers. Beiersdorf was founded in 1882. The German group has become a global player in the cosmetics sector, with a notable presence in the manufacture of adhesives. Employing over 20,000 people, the German company is best known for its skincare brands Nivea, Eucerin and La Prairie, as well as for its adhesives under the Tesa brand. Beiersdorf’s core business is based on two main segments: cosmetics and adhesives. Cosmetics, which generate 82.4% of sales, include face and body care products, hair care products, as well as dressings and bandages. Our flagship brand, Nivea, accounts for a significant proportion of sales, thanks to its extensive range from moisturizers to shaving products and deodorants. The adhesives segment, although less well known, plays a crucial role in the company’s revenues, contributing 17.6% of sales. Tesa, the brand under which these products are marketed, is used in both industrial and domestic applications. Beiersdorf has a global footprint, with revenues distributed between Europe (44.1%), Africa-Asia-Australia (26.3%), and the Americas (29.6%). This geographic distribution reflects the company’s international reach and its ability to adapt to different markets. Beiersdorf continues to strengthen its market position through constant innovation and product diversification. The company has recently focused on premiumizing its products, targeting a more affluent clientele and thereby increasing profit margins. Despite challenges such as high costs and increased competition, the company has maintained stable growth, with a notable increase in Nivea sales. The company also benefits from a strong financial position, enabling it to invest in new market opportunities and product innovation. With a well-balanced strategy between its two main business segments, and a strong presence in international markets, it is well positioned for further growth and leadership in the skin care and adhesives sector. Investors and consumers alike can expect to see the company adapt and innovate in the years ahead, responding to the changing needs of its global customer base.

  • Elf Beauty shows its mettle to enter the big league

E.l.f. Beauty, based in Oakland, California, stands out in the consumer cyclical sector as a beauty products company. It was founded by Joseph Shamah and Scott Vincent Borba in 2004. With a range of vegan and cruelty-free cosmetics and skincare products, e.l.f. Beauty responds to a growing demand for inclusive and accessible products. Its brands, such as e.l.f. Cosmetics and e.l.f. SKIN, are positioned in several beauty segments, available online and in various distribution channels in the United States, its main market generating 87.55% of its revenues. The company distinguishes itself from its competitors through its commitment to clean, affordable products, a strategy that attracts a loyal and diverse customer base. The historical growth of e.l.f. Beauty is testament to its ability to adapt and innovate. Sales have risen from $229.6 million in 2016 to $578.8 million in 2023. CAGR over the last three years is 43.6%. The consensus is for sales to triple over the next three years (estimated sales for 2026 of $1467 million). Financial analysis reveals impressive profitability, with high ROE (25.4% in 2023), high operating (17.4%) and net (10.6%) margins, and solid free cash flow generation (FCF conversion of 162%). The company recently acquired the Naturium brand for $355 million in October 2023. The balance sheet shows a healthy cash position and the ability to repay debt, reinforcing investor confidence. The management team, led by CEO Tarang Amin, benefits from solid experience and recognition for its effective leadership. E.l.f. Beauty, Inc. presents itself as a dynamic and profitable company, with a clear strategy and effective execution, offering an attractive value proposition for consumers and investors alike.

  • Puig bets on a listing on the Spanish stock exchange

Puig Brands, a renowned company based in Barcelona, Spain, specializes in the manufacture and marketing of perfumery and homeware products. Founded in 1914, this holding company recently went public, marking a milestone in its century-long history. With an impressive market capitalization of 13.24 billion euros, the Spanish company is positioned as a major player in the cyclical consumer sector, more specifically in the field of beauty products. It owns and manages several prestigious brands such as Nina Ricci, Paco Rabanne, Jean Paul Gaultier, Carolina Herrera and others, asserting its presence in the world of luxury. In addition, the company has established licensing partnerships with renowned brands such as Prada and Christian Louboutin, further enriching its portfolio. Puig’s recent IPO was priced at 24.50 euros per share, with a valuation of almost 14 billion euros. This operation enabled Puig to join the Ibex 35, the index of leading Spanish companies, thus reinforcing its visibility and attractiveness on the market. Puig’s business model is based on a strategy of growth and diversification. In 2023, the company generated sales of 4.3 billion euros, with net profit up 16% on the previous year. These solid financial results are the fruit of ongoing expansion and the acquisition of new brands, enabling Puig to diversify its revenue sources and strengthen its position in the international market. Its customer base is global, with a strong presence in Europe and significant expansion in Asia, particularly China, a key market for the luxury goods sector. The company employs over 11,000 people, demonstrating its scale and impact in the beauty industry. Puig Brands stands out for its strategic approach and ability to innovate in the luxury beauty sector. With its successful IPO and robust financial performance, the company is well positioned to continue to grow and compete with other luxury giants such as Estée Lauder and LVMH. The future looks bright for this Catalan beauty house, which continues to build on a heritage of over a century.

Oddity Tech, an innovative Israeli company in the beauty and wellness sector, stands out for its advanced use of technology to offer personalized cosmetics. With a market capitalization of USD 2.1 billion in 2024, Oddity Tech operates primarily online, offering brands such as Il Makiage and SpoiledChild, which have rapidly surpassed established giants such as MAC in terms of online growth. Oddity Tech uses algorithms and machine learning models to create precise matches between products and consumer needs. This approach enables the development of cosmetic products that specifically meet customer expectations. The company relies on massive data, collecting 1 billion data points from 40 million users, to refine its product recommendations. The company’s direct-to-consumer strategy enables it to reach a large international audience. The majority of its revenues now come from loyal customers, underlining the effectiveness of its personalization-based model. Its 90% accuracy in matching skin products, compared with 80% for in-store equivalents, has attracted over 4 million customers. Analysts are optimistic about Oddity Tech’s future, forecasting strong growth in net earnings per share in coming years. The company benefits from a solid financial position, with significant capacity for investment. However, with a PER of 23.09 times earnings for 2024, the valuation is considered high in relation to the size of its balance sheet. The company is several years ahead of its competitors thanks to its advanced technology. The company has the potential to capture a significant share of a fast-growing market, thanks to its innovations in personalized beauty and wellness products. Future events, such as quarterly earnings releases, will be crucial in assessing the company’s ability to maintain its growth trajectory. The company represents an intriguing opportunity for investors interested in a business that combines cutting-edge technology and rapid growth in the beauty sector. However, its high valuation calls for a cautious analysis of the potential risks associated with an investment in this dynamic but expensive company.

  • Galderma, the upper class

Switzerland-based Galderma Group is a leading player in the dermatology and skin care sector. Specializing in dermatological treatments, Galderma offers a wide range of products, including neuromodulators, dermal fillers and biostimulators. These products are mainly used to treat wrinkles through injections and stimulate cells for optimal function. Galderma focuses on the production and distribution of dermatological solutions through an integrated process that covers research, development and manufacturing. The company also manages training programs and scientific commitments to support the use of its products. Its customer base is global, with a marked presence in the United States, where it generates almost 48% of its revenues. The rest of its activities are spread across various international markets, reflecting its global footprint. With a market capitalization of CHF 18.4 billion and an estimated enterprise value of CHF 20.7 billion for 2024, Galderma boasts high valuation multiples, reflecting its unique market position and solid growth prospects. Analysts forecast annual revenue growth in excess of 10% over the next few years, with operating margins set to remain above 20%. The company is positioned as a leader in the field of dermatology, with a well-defined strategy and a portfolio of innovative products. Despite its high valuation, the company has significant growth potential, underpinned by ongoing innovation and a strong international presence. Investors and customers can look forward to Galderma continuing to play a major role in improving dermatological care worldwide.

  • Intercos, the discreet but efficient supplier

Intercos S.p.A., based in Italy, is a leading figure in the personal products sector, specializing in the manufacture of cosmetics. Founded in 1972, the company has distinguished itself through its expertise in the production of make-up and skincare products, offering a wide range of goods including powders, lipsticks, foundations and nail care, among others. Intercos focuses primarily on production for third-party brands, enabling it to collaborate with some of the biggest names in the global cosmetics industry. The company also manages CRB, a Swiss skincare company, strengthening its portfolio in this segment. In addition to its make-up lines, Intercos offers products for face, body, sun and hair care, as well as organic and active products. Research and development are at the heart of Intercos’ operations, with a strong focus on innovation and personalization of skin care products. This approach enables the company to maintain a leading position in the creation of new formulas and products to meet the specific needs of its customers. Serving mainly world-renowned cosmetics brands, the Italian company benefits from a diverse and international customer base. It operates globally with 15 sales offices and 15 production sites in 12 countries, enabling it to have an extensive reach while adapting its services to local specificities. With a market capitalization of €1.334 billion in 2024, Intercos is showing solid growth. Nevertheless, analysts remain positive, highlighting significant upside potential for the stock thanks to positive revisions to their estimates. Despite certain challenges, such as a high valuation and past performance that has sometimes fallen short of expectations, Intercos continues to enjoy a strong Buy or Overweight recommendation from market experts. The company stands out in the cosmetics industry for its commitment to innovation, quality and customer satisfaction. With a clear focus on research and development and a strong international presence, the company is well positioned to continue to prosper in the cosmetics sector. Investors and customers can look forward to Intercos maintaining its leadership role in setting beauty trends worldwide.

  • Kenvue, a Johnson & Johnson spin-off

Kenvue, recognized for its global leadership in the design, manufacture and marketing of consumer healthcare products, continues to make its mark on the industry. Formerly a division of Johnson & Johnson, Kenvue has established itself as an independent entity, carrying such renowned brands as Aveeno, Tylenol, Neutrogena, and Band-Aid. The company’s business model is based on the effective diversification of its products, which are grouped into three main categories: health products (examples: Tylenol, Nicorette, Imodium, Zyrtec, Microlax), personal care and other specific products such as oral and baby care. These products cover a wide range of needs, from the treatment of common symptoms such as coughs and colds to specialized skin and hair care. These products are marketed through several channels, including direct sales, distributors and online platforms, ensuring broad accessibility for consumers. The company primarily targets the end-consumer market for quality health and wellness products. The geographical distribution of its revenues bears witness to its global presence, with operations extending beyond US borders, enabling the company to reach a diverse customer base on an international scale. Despite a context of moderate growth, Kenvue maintains high margins. However, analysts have recently adjusted their forecasts, suggesting profitability potentially below previous expectations. These revisions reflect challenges, but also caution about the company’s ability to maintain its performance levels. Kenvue’s valuation, while considered high relative to its tangible assets, remains underpinned by an ongoing commitment to innovation and operational excellence. The company is positioned as a leading player in the consumer healthcare sector, with a diversified product range and an effective multi-channel marketing strategy. However, investors and stakeholders will need to keep a close eye on analysts’ forecast adjustments and future performance indicators. With key events such as upcoming earnings releases, Kenvue remains a company to watch in the dynamic evolution of the health and beauty market.

  • Estée Lauder: The Boeing of cosmetics

Estée Lauder Companies is a global player in the cosmetics industry, offering a wide range of skin care, make-up, fragrance and hair care products. Somewhat disappointing in recent years (like Boeing versus Airbus), the U.S.-based company is the world’s second-largest cosmetics group.The US-based company is the world’s second-largest cosmetics group, just behind L’Oréal, and the third-largest in the luxury goods sector, after LVMH and Kering. The company markets its products under a number of well-known brands, including M-A-C, Bobbi Brown, La Mer and Jo Malone London, as well as under licensed brands such as Tommy Hilfiger and Michael Kors. The breakdown of sales by product category shows a predominance of skincare, which accounts for 58.4% of revenues, followed by make-up products (25.9%), fragrances (11.9%), and hair products (3.5%). The company generates its revenues across various regions, with a notable presence in Europe, the Middle East and Africa (42.8%), Asia-Pacific (33.8%) and the Americas (23.4%). Its products are sold via some 1,600 points of sale, including department stores, perfumeries, pharmacies, beauty salons, exclusive boutiques and online. Despite its stature, the company faces significant challenges. It is currently valued at high multiples, with a PER of 62.2 times anticipated earnings for 2024. This high valuation, combined with relatively weak revenue growth and downward revisions to sales forecasts, underlines the difficulties encountered, particularly in Asia, where economic recovery is slower than hoped. As a result of the headwinds and mismanagement of recent years, Estée Lauder has lost its qualitative status. That said, it still has a fine portfolio of prestigious brands. The recent acquisition of Tom Ford for $2.3 billion demonstrates a strategy of expansion into fashion and could potentially revitalize sales. In addition, the 40% drop in share value over the past year could present a buying opportunity for investors, anticipating a rebound, particularly if the situation in China improves. Estée Lauder, despite its current challenges and high valuation, continues to hold significant potential thanks to its strong brand presence and strategic efforts. However, investors should remain cautious and watchful of future developments, particularly with regard to the performance of the Asian market and the integration of new acquisitions.

  • Coty: The American company returns to its roots

Founded in 1904 in Paris, Coty is today one of the world’s leading beauty companies. Specializing in fragrances, color cosmetics, skin and body care, Coty distributes its products in over 125 countries and territories worldwide. The company operates mainly in three product segments: fragrances, which account for 59% of sales, color cosmetics (28%), and skin and body care products (13%). It stands out for its portfolio of prestige brands, offering high-end products as well as items accessible to the general public. Coty’s customer base is global, with a significant presence in Europe, the Middle East and Africa, which together generate around 45% of its annual net sales. The remainder of revenues come from the Americas and Asia-Pacific, making Coty a truly international brand. Coty recently announced its intention to also list on the Paris Bourse, in addition to its main listing in New York. This move is aimed at strengthening its presence in Europe and attracting more international investors. The company has also revised upwards its annual sales forecasts, thanks to robust demand for its luxury products, despite a global economic context marked by inflation. With a market capitalization of USD 9.69 billion in 2024, Coty shows an ambitious valuation. However, the company has a high level of debt relative to EBITDA, which could represent a risk for investors. The valuation multiples, though high, reflect analysts’ positive expectations regarding the company’s future growth. The company continues to strengthen its position in the global beauty industry. With its historical roots and focus on innovation and accessible luxury, Coty is well positioned to continue to captivate a diverse and demanding global customer base. However, investors will need to keep a close eye on debt levels and valuation multiples to optimize their long-term investment strategies.

Comparative table of key financial statistics for these 10 companies:

 



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