Overview#
Morgan Stanley has recently downgraded Beiersdorf AG and Henkel AG & Co. KGaA to an "underweight" rating. This decision comes as the firm cuts price targets and highlights potential risks to earnings for both companies.
Price Target Adjustments#
Beiersdorf's price target has been reduced by 8%, from €84 to €77, while Henkel's target has been lowered by 2%, from €68 to €66.50. Previously, both companies were rated as "equal-weight," indicating a neutral stance. As of March 13, Beiersdorf was trading at €78.44 and Henkel at €70.08.
Market Share and Earnings Risks#
Analysts noted that Beiersdorf's Nivea brand has been losing market share in Western Europe, with declines recorded every month from February 2025 to January 2026. The losses ranged from 20 to 120 basis points. A new product launch under the Nivea brand in September 2025 provided only temporary relief.
Morgan Stanley has also revised its earnings estimates for fiscal year 2026, lowering the adjusted EBIT margin from 13.7% to 13.5%. The underlying earnings per share (EPS) estimate has decreased from €4.42 to €4.33, which is 4% below the consensus estimate of €4.51.
Comparisons with Peers#
In comparison to its peers in the European household and personal care (HPC) sector, Henkel's gross margin of 50.8% is the lowest, while L’Oreal leads with 74.3%. Morgan Stanley's estimates for Henkel's adjusted EBIT for fiscal year 2026 have also been cut from €3.12 billion to €3.04 billion.
Overall, Morgan Stanley's forecast for organic sales growth for fiscal year 2026 is set at 1.1%, which is at the lower end of the company's guidance range of 1% to 3%. The brokerage has rated Haleon, Reckitt, and Unilever as "overweight," while Beiersdorf and Henkel remain the only companies rated as "underweight."