Verily, Alphabet’s (GOOGL) healthcare-focused unit, has entered into a strategic partnership with beauty products giant L’Oreal (LRLCY). The deal is Verily’s first in the beauty industry and entails two programs aimed at advancing skin health. Alphabet is among the S&P 500 companies.
The first part of the arrangement is expected to focus on research. This segment will leverage Verily’s clinical science capabilities and L’Oreal’s knowledge to discover more about the skin.
In the second part of the arrangement, L’Oreal and Verily will explore the development of new technologies that can lead to new skincare services.
The companies will look at the use of sensors and artificial intelligence algorithms in skincare. L’Oreal hopes that the collaboration with Verily will benefit its precision beauty strategy.
The Co-Founder of Verily, Brian Otis, said, “We recognize skin health as a critical need for overall wellness…Our collective approach has the potential to identify the right intervention based on data, powered by Verily’s technology and clinical science abilities combined with L’Oréal’s beauty industry leading intelligence and dermatology network.”
L’Oreal has been in the beauty business for more than 100 years. It has a portfolio of 35 brands. Verily is part of Alphabet’s Other Bets segment, which also houses self-driving unit Waymo. Alphabet’s Other Bets revenue rose to $182 million in the third quarter of 2021 from $178 million in the same quarter last year.
Price Target
Citing the strength of Alphabet’s search business, Bank of America Securities analyst Justin Post recently reiterated a Buy rating on the stock and raised the price target to $3,470 from $3,210. Post’s new price target suggests 30.15% upside potential.
Consensus among analysts is a Strong Buy based on 26 Buys and 2 Holds. The average Alphabet price target of $3,387.59 implies 27.06% upside potential.
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