J.P. Morgan European Beauty: Read-Across from Global Beauty Peers
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J.P. Morgan provides a valuation and fundamental read-across from global beauty peers to assess the European beauty sector. The analysis reveals that global beauty industry valuations currently sit at historical lows, with peers averaging an EV/EBITDA multiple of 12.5 times for 2026, down from the five-year average of 15.2 times. Conversely, European beauty companies trade at an average of 13.8 times, commanding an approximate 10% premium over their global counterparts.
This valuation premium is fundamentally justified by the superior profitability of European firms, which boast an average margin of 18.5% compared to the global average of 15.2%. Sluggish demand in China remains the primary downside risk, yet European companies maintain relatively limited exposure, with China accounting for roughly 15% of total revenues. Furthermore, US market exposure provides a stable buffer, while declining raw material costs are projected to expand gross margins by 50 to 100 basis points in 2026.
The report concludes that current European beauty valuations have largely absorbed prevailing negative sentiment, leaving limited downside risk. Investors are advised to monitor structural growth opportunities while awaiting definitive demand recovery signals.
Key exhibits
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