Beiersdorf downgraded as Jefferies cuts PT amid Nivea slowdown, La Prairie falters

Investing.com -- Jefferies downgraded German personal-care products maker, Beiersdorf (ETR:BEIG) to “hold” from “buy” and slashed its price target by 19% to €101 from €125, warning that the company’s core Nivea brand has lost growth momentum and luxury unit La Prairie remains under pressure, in a note dated Tuesday. 

With shares last closing at €94.40, the revised price target of €101 implies 7% upside, well below prior estimates. 

Nivea, which makes up roughly 70% of the consumer division’s revenue, recorded just 1% organic growth in the first half of 2025, well below the 4% threshold Jefferies says is needed for the stock to re-rate. 

“Like many of our larger competitors, we are facing increased competition from local brands,” Beiersdorf’s chief executive told investors at second-quarter results, noting in sun care “It’s very difficult to explain why NIVEA SPF 50 is worth three times the SPF 50 of a private label.” 

The new Nivea Epicelline serum, launched in August as part of the Epigenetic range, is central to management’s recovery plan. The company expects sales of about €80 million in the second half, aided by rollout across 30 markets. 

But Jefferies projects a smaller €45 million net contribution, citing likely cannibalisation of existing products. 

The brokerage warned that the growth pattern “heavily mirrors” past cycles where incremental spending lifted sales temporarily but failed to sustain momentum. 

“We fear a repetition re the 2011-2017 strategic plan,” analysts said. La Prairie’s recovery also appears elusive. Once contributing more than 10% of consumer division sales before the pandemic, the brand’s share fell below 5% in 2024. 

Sales dropped 10.8% in the first half of 2025, with Jefferies flagging ongoing destocking in travel retail and weakening demand in China. 

Analysts now assume only low-single-digit midterm growth, highlighting consumer substitution toward cosmetic procedures and cheaper derma brands. 

The brokerage noted “a symptom of the brand losing its consumer purpose,” further pressured by a wave of online “dis-influencing” content.

Margins are expected to remain tight. Jefferies cut its 2026 group operating margin forecast by 10 basis points to 14.1%, under the 14.3% consensus, and sees little room for more than “modest” improvement. 

EPS forecasts were reduced by 4% for 2025 and 2% for 2026. Free cash flow to equity yield is projected at 5.2%, up from 4.8% but still within the range of peers Nestlé and Unilever. 

The analysts warned the company’s €4.5 billion net cash remains underutilised, creating a 10% drag on valuation.

Jefferies added that Beiersdorf’s reliance on Nivea’s revival and La Prairie’s uncertain turnaround constrains confidence. “This cycle is being repeated, with Nivea struggling for the growth needed to make the stock work,” the analysts said.