DZ Bank Lowers Fair Value For Beiersdorf to 129 Euros - 'Hold'

DZ Bank reduced its target price on Beiersdorf AG from 153 to 129 euros and reiterated a 'hold' rating on the stock.

Analyst Sven Pokorny said in a research note that the consumer goods company's earnings momentum and macro environment for 2023 are likely to be more challenging than previously anticipated.

DZ Bank trimmed its earnings per share estimates for 2023 and 2024 by 2% and 1%, respectively, citing a likely slowdown in consumer demand and inflation-driven margin pressure.

The analyst, however, noted that Beiersdorf's portfolio remains solid and its long-term growth prospects are intact. He also sees potential for margin improvements in the medium term as raw material costs ease.

Pokorny said that Beiersdorf's shares are currently trading at a premium to peers and that the stock's potential upside is limited in the near term.

DZ Bank's downgrade comes after Beiersdorf reported a 5.4% rise in organic sales in 2022, driven by price increases and growth in emerging markets. The company's earnings before interest and taxes (EBIT) rose by 9.7% to 1.26 billion euros, supported by cost-cutting measures.

Beiersdorf's shares have fallen by around 10% since the start of 2023, underperforming the broader German market.