Henkel: stock up as Deutsche Bank less negative

(CercleFinance.com) - Henkel gained ground on the Frankfurt Stock Exchange on Thursday, following a recommendation upgrade by Deutsche Bank, which was slightly less negative about the German consumer goods giant.


Henkel shares are currently up 1.7%, the second biggest gainer on the DAX behind Siemens (+1.8%), while the index is pretty flat (+0.1%) at the same time.

While he believes the company still has "a lot to prove", the analyst can't help noticing that the stock has lost 2.1% of its value since the start of the year, while the MSCI Europe has risen by 4% over the same period.

Considering that EPS have outperformed by 15%, the stock's P/E has now returned to 14x at 12 months, the broker points out.

While it believes that the Q1 publication will not lead to any reduction in consensus estimates, Deutsche is concerned about the level of profit margins in adhesives.

As far as consumer brands are concerned, DB points to the need to implement a cost-cutting program, but also sees a "considerable" need to invest in innovation.

It therefore upgrades the stock from "sell" to "hold", with a target price raised from E60 to E70.


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