Lowering Our Valuation of Henkel Due to Rising Customer Acquisition Costs
Henkel’s fourth quarter was in line with our estimates on the top line, but the company posted a strong EBIT margin of 17.6%, above our forecast. Given the weak pricing power evident in the results, this is not likely to be sustainable next year, and those two factors offset each other from a valuation perspective, so we are likely to maintain our EUR 117 fair value estimate. Although we think it is priced in and the stock offers upside, we expect Henkel to suffer more than most from rising comm...Henkel business comprised of Laundry & Home Care, Beauty Care, and Adhesive Technologies. Co.'s Laundry & Home Care business unit include laundry and home care Branded Consumer Goods business. The Laundry Care business includes heavy-duty and specialty detergents, fabric softeners, laundry performance enhancers, and other fabric care products. Co.'s Beauty Care business unit is active in the Branded Consumer Goods business with Hair Cosmetics, Body Care, Skin Care, Oral Care, and professional Hair Salon business. Co.'s Adhesive Technologies business unit provides solutions with adhesives, sealants and functional coatings in two business areas: Industry; and Consumer, Craftsmen and Building.
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