Goldman Sachs cuts Beiersdorf stock rating on margin concerns

Goldman Sachs has lowered its rating on Beiersdorf AG to "Sell" from "Neutral" and reduced its price target to EUR73.00 from EUR82.00. The investment bank expressed concerns over the company's ability to improve margins in fiscal year 2026 due to increased competition from Unilever and L'Oréal. Beiersdorf plans to invest an additional EUR100 million in advertising and promotions for the second half of 2026, but this investment is still considered modest compared to competitors' marketing budgets.

The firm highlighted the focus on premiumizing the Nivea brand instead of strong execution across the broader portfolio, which is already dominated by Nivea at 66% of group Consumer sales, compared to 20% for Derma. Goldman Sachs expects Beiersdorf's organic sales growth to remain limited to 2%-3% in the mid-to-long term, trailing its peers in Beauty and household and personal care categories.

The firm forecasts a 5% compound annual growth rate for earnings per share from 2027-2029 and a 1% dividend yield. Currently, Beiersdorf trades at a price-to-earnings ratio of 14.5 times excluding cash and 8.3 times enterprise value to EBITDA. Despite growth challenges, the company maintains a strong gross profit margin of 57%, making it one of the undervalued stocks on the InvestingPro list.

Beiersdorf is scheduled to report its third-quarter results on October 27. Meanwhile, Jefferies recently reduced 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 Western European destocking as well as retailer tensions.