L'Oréal's Beauty Leadership and Investment Discipline Position It for Durable Growth

As the largest beauty product maker globally, L’Oréal has amassed an impressive collection of top-selling beauty brands across core categories (skin care, makeup, hair care, and fragrances) that straddle the premium and mass segments. We believe its strong brand intangibles based on innovation, marketing, and consumer knowledge, coupled with scale-based cost advantages, should support a durable competitive edge, enabling the firm to deliver excess returns for more than 20 years. We assign L’Oréal a Morningstar Economic Moat Rating of wide.