On Thursday, Beiersdorf AG (ETR:BEIG) (BEI:GR) (OTC: BDRFY), the $29.76 billion personal care products giant, received an upgrade from Bernstein SocGen Group, moving from a "Market Perform" to an "Outperform" rating.
Accompanying the upgrade is an increase in the price target to EUR 147.00 from the previous EUR 135.00. According to InvestingPro data, the company maintains impressive gross profit margins of 58.14% and has shown consistent financial strength with a GOOD overall health score.
The upgrade comes with a positive outlook for the company's future, with Bernstein analysts expressing confidence in the "Warnery Revolution," referring to the leadership of CEO Vincent Warnery and the strategic changes he has implemented.
The analysts at Bernstein are optimistic about Beiersdorf's potential, designating it as their top pick for 2025. This sentiment is based on the company's recent performance and initiatives, which include consistent market share gains under Warnery's leadership.
The company's solid fundamentals are reflected in its 4.61% revenue growth and strong liquidity position with a current ratio of 1.69. The firm's expectations are particularly high for the year 2025, following the second half of 2024 launch of Epicellin, which is anticipated to be integrated across Beiersdorf's range of brands.
The positive forecast is also supported by the recent approval of Thiamidol in China, a development expected to spur innovation in that market. Additionally, the luxury skincare brand La Prairie, part of Beiersdorf's portfolio, has shown a resurgence in market share gains. These factors contribute to Bernstein's estimates for Beiersdorf's financial year 2025 being approximately 3% above the consensus.
In setting the new price target, Bernstein analysts applied an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 11.2x to their enhanced forward next twelve months plus one (NTM+1) EBITDA estimate of EUR 2,021 million.
InvestingPro analysis reveals the company currently trades at an EV/EBITDA of 16.85x and a P/E ratio of 39.6x, with several additional valuable metrics available to subscribers, including detailed Fair Value calculations and comprehensive financial health scores. This valuation reflects a more conservative multiple compared to the previous 14.8x, yet still represents a bullish stance on the company's value.
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