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Deutsche Bank (ETR:DBKGn) lowered its price target on Beiersdorf AG (ETR:BEIG) (BEI:GR) to EUR98.00 from EUR99.00 on Wednesday, while maintaining its Sell rating on the skincare company. The adjustment reflects the bank’s reduced growth expectations for the consumer products maker.
The bank now forecasts 3.1% organic growth in Beiersdorf’s Consumer segment for fiscal year 2025, down from its previous estimate of 4.0%. Deutsche Bank’s projections place it approximately 3% below consensus earnings estimates for FY25 and about 6% below for FY26.
Deutsche Bank cited concerns about Beiersdorf’s ability to continue premiumizing its NIVEA brand at current rates, describing this challenge as a "glass ceiling to growth and returns." The bank’s revised model anticipates second-quarter organic growth of just 2.3%, with improvement to 4.0% in the second half of the year.
The bank identified several headwinds that could impede a significant second-half improvement, noting that such improvement would be largely dependent on restocking and inventory factors. Deutsche Bank also expressed skepticism about margin expansion, modeling only 30 basis points of Consumer margin improvement in both FY25 and FY26.
Deutsche Bank suggested that Beiersdorf’s shift in emphasis away from margin as a target might signal "greater competition and lower longer term mix benefits" for the company, which produces brands including NIVEA, Eucerin, and La Prairie.
In other recent news, Beiersdorf AG reported its first-quarter results, revealing a 3.6% organic sales growth year-over-year. This performance surpassed the Visible Alpha consensus of 2.7%, indicating stronger-than-expected results. The company’s Consumer business division, which includes the Nivea brand, posted a 2.3% growth, slightly below the market consensus of 2.5%. Meanwhile, the adhesives division, tesa, significantly exceeded expectations with a 10.7% increase in sales, compared to the anticipated 3.3%.
Nivea saw a 2.5% growth, higher than the expected 1.5%, while the Derma product line outperformed projections with an 11.4% increase. However, the luxury skincare brand La Prairie experienced a 17.5% decline in sales, a steeper drop than the predicted 8.4%. Beiersdorf’s total sales reached EUR2,691 million, which was 1% above consensus expectations. Berenberg, in light of these results, adjusted the company’s price target to EUR163.00 from EUR165.00 but maintained a Buy rating, indicating a positive outlook on the stock.
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