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Investing.com -- Henkel (ETR:HNKG_p) has received a ’buy’ upgrade from ’hold’ by analysts at Deutsche Bank, with a revised target price of €80, up from €76, in a note dated Wednesday.
The upgrade comes as the brokerage flags the market’s increasingly pessimistic outlook on Henkel’s growth prospects, following disappointing updates in the past two quarters.
This negative sentiment has contributed to consensus forecasts predicting a year-on-year decline in sales growth for the next 12 months.
Historically, such periods of sales decline, while often leading to earnings downgrades, have also marked the bottom for Henkel’s share price.
The brokerage acknowledges that Henkel carries higher risk compared to other consumer staples companies due to its more cyclical business model, which tends to exhibit greater operational leverage.
However, they believe much of this risk is already reflected in the stock’s current valuation, as it is trading at an all-time low relative to the broader market in terms of its price-to-earnings ratio.
In terms of earnings projections, analysts have made only foreign exchange adjustments to their estimates, following Henkel’s first-quarter results. Their earnings estimate for fiscal year 2026 is already 5% below the market consensus.