Goldman Sachs Downgrades Beiersdorf on Margin and Growth Concerns
Goldman Sachs has downgraded Beiersdorf AG to a Sell rating from Neutral, lowering its price target to EUR73.00 from EUR82.00. The firm expressed concerns about the company's ability to drive significant top-line improvements by fiscal 2026, especially with intensifying competition from Unilever and L’Oréal. Goldman Sachs noted that Beiersdorf's planned EUR100 million investment in advertising and promotions for the second half of 2026 may not be enough to match competitors' marketing budgets.
The firm also highlighted that Beiersdorf's focus on premiumizing the Nivea brand has overshadowed strong execution on its core portfolio. This has been further complicated by a lack of mergers and acquisitions. While the Derma segment remains a bright spot, it only accounts for 20% of group Consumer sales, compared to 66% for Nivea.
Goldman Sachs expects Beiersdorf Consumer’s organic sales growth to be limited to 2%-3% mid-to-long term, below its peers in the Beauty and household and personal care sectors. The firm forecasts a 5% earnings per share compound annual growth rate for 2027-2029 and a 1% dividend yield. Despite these challenges, the company maintains an impressive gross profit margin of 57%.
Beiersdorf trades at 14.5 times calendar year 2027 price-to-earnings excluding cash and 8.3 times enterprise value to EBITDA. Currently, the stock trades at a P/E of 17.64 and EV/EBITDA of 7.74. InvestingPro’s Fair Value analysis suggests the stock is undervalued at current levels, placing it among opportunities on the Most Undervalued stocks list. The company is set to report third-quarter results on October 27.
In related news, Beiersdorf reported second-quarter revenue of $2.84 billion, slightly missing the forecast of $2.86 billion. The company warned that full-year sales are expected to decline at a low-single-digit rate due to ongoing challenges with its Nivea brand and broader market pressures. Jefferies also lowered its price target for Beiersdorf from EUR76.00 to EUR74.00, maintaining a Hold rating on the stock, citing concerns about the Nivea brand and issues like Western European destocking and retailer tensions.