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On Wednesday, Deutsche Bank (ETR:DBKGn) upgraded Henkel AG & Co KGaA shares, listed on the Frankfurt Stock Exchange (HEN:GR) and over-the-counter (OTC:HENKY), from ’Hold’ to ’Buy’, increasing the price target to €80.00 from the previous €76.00. The adjustment comes after a period of market disappointment due to the company’s last two performance updates, which have led to a pessimistic view of the company’s growth prospects.
Henkel’s recent updates have shown a year-on-year decline in consensus forward 12-month sales growth expectations. This trend typically signals impending earnings downgrades but also often coincides with the share price reaching a low point. Deutsche Bank acknowledges that Henkel carries higher risks compared to other companies in the Staples sector due to its more cyclical business model and a history of greater operational gearing.
Despite these risks, Deutsche Bank points out that Henkel’s price-to-earnings (PE) ratio is at an all-time low relative to the market, suggesting that much of the negative sentiment may already be reflected in the current share price. The bank has made adjustments to its earnings forecasts based solely on foreign exchange (FX) rate changes, which were updated following the company’s first-quarter results. Notably, Deutsche Bank’s forecasts for the financial year 2026 are already 5% below the consensus.
The analyst’s statement emphasizes that while Henkel’s stock remains more volatile, the current valuation levels could represent an opportunity for investors. The bank’s revised price target implies a potential upside from the current trading levels, reflecting a more optimistic outlook for Henkel’s shares going forward.
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