Wednesday, HSBC upped the price target of Henkel AG (OTC:HENKY) & Co KGaA (HEN3:GR) (OTC: HENOY) shares to €98.00 from €95.00, while maintaining a Buy rating on the stock. The analyst cited the company's strong profitability and the expectation of further profit upgrades as the primary reasons for the optimistic outlook.
Failko highlighted that Henkel's performance in 2024 surpassed expectations, particularly noting the significant profit upgrades. Despite these upgrades, the analyst observed that the market's response was subdued in relation to the robust growth anticipated for the company.
Looking ahead to 2025, HSBC expects Henkel to achieve positive volumes in its Home & Personal Care (HPC) segment, which is anticipated to bolster investor confidence in the company's ongoing turnaround. Additionally, the Adhesives business is predicted to continue outperforming its end markets.
The analyst also projected that while margins are likely to improve, the pace of this progress might be slower than what was seen in 2024. This combination of factors, including another year of expected upgrades and balanced top-line growth, is believed to position Henkel to generate positive returns for shareholders.
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