Key development
Berenberg on Thursday downgraded Beiersdorf AG to a "hold" rating from "buy," cutting its 12-month price target to €83 from €144. The decision follows weaker-than-expected performance from the company’s flagship Nivea brand and a reassessment of the outlook for sales growth and margins that had supported Berenberg’s nearly five-year buy recommendation.
Performance context
Since Berenberg upgraded the stock in June 2021, Beiersdorf’s shares have declined 25%, while the Stoxx 600 returned about 30% over the same period. The downgrade reflects a reassessment of the investment thesis that previously relied on stronger organic top-line growth and operating margin expansion driven by new product rollouts and distribution gains in priority markets.
What went wrong in 2025
Berenberg noted that Nivea, which it values at €5.5 billion, grew just 0.9% in 2025. That pace lagged the broader skincare market growth of roughly 1% to 1.5%, and resulted in market-share loss despite product introductions including the Epicelline anti-ageing line launched in September and the roll-out of Thiamidol in China during the fourth quarter. Weakness appears concentrated in eastern Europe, the deodorants category and in specific markets such as France, Poland, Brazil and China.
Management actions and implications
Company management plans to reallocate R&D and marketing investment away from facecare and toward bodycare and deodorants in 2026. Berenberg warned that this strategic shift "may come at the expense of lower growth in the higher-value/margin facecare range." The brokerage has adjusted its forecasts to reflect lower near-term visibility for higher-margin facecare growth.
Updated forecasts
Berenberg trimmed its organic sales growth forecast for 2026 to 0.7% from a previous 5.4%, and cut the 2027 forecast to 3.1% from 5.5%. It now projects total revenue of €9.939 billion for 2026. The brokerage also lowered its EBIT margin assumptions to 13.7% for 2026 and 13.9% for 2027, down from prior estimates of 14.3% and 14.5% respectively.
EPS estimates were reduced by 9% for FY26, 13% for FY27 and 17% for FY28. Adjusted EPS is forecast at €4.41 in 2026, a decline of 0.9% year-on-year, before rising to €4.73 in 2027 and €5.06 in 2028. Free cash flow, which collapsed to €280 million in 2025 from €722 million in 2024, is expected to recover to €813 million in 2026.
Valuation and model changes
Berenberg’s €83 target is derived from a discounted cash flow model that now applies a risk premium of 8%, up from 6%, reflecting reduced growth visibility. The long-term growth assumption was lowered to 2% from 2.5%. The stock trades at a 12-month forward price-to-earnings multiple of 16x, versus a peer average of 18x. The brokerage said a meaningful re-rating would depend on an acceleration in organic sales growth, which it suggested may not occur before 2027.
Noted risks
Berenberg flagged an additional downside risk from potential adverse U.S. tariff changes, estimating an impact of around 50 basis points to gross margins should such measures materialise.
This analysis focuses on reported guidance and broker revisions. All figures and forecasts above reflect Berenberg’s published adjustments and management commentary referenced in those revisions.