Barclays says European beauty remains attractive, but flags challenges ahead

Essity AB (publ)

15/07/2025 09:21

** Barclays says growth in the European beauty sector remains robust, but warns certain challenges cloud the industry's once-clear success formula for global manufacturers

** It says the beauty industry is at an interesting cross-roads where success depends on brand longevity, originality, quality and continuous reinvention

** Changed consumer habits mean companies cannot rely on traditional customer models based purely on demographic differences, it adds

** Barclays downgrades L'Oréal OREP.PA to "underweight", saying its outperformance is waning and barriers to enter the market are lower

** It also cuts hygiene products maker Essity ESSITYa.ST to "underweight" on an expected moderation of growth in Q2

** Rabanne perfume owner Puig PUIGb.MC also faces softening Q2 growth, the broker says, cutting it to "equal weight"; adds the company's EMEA region growth will likely remain lower for the rest of 2025

** Barclays upgrades Persil owner Henkel HNKG.DE to "overweight", saying the comparison base will get easier with innovation coming in H2 alongside less U.S. destocking

COMPANY
RATING
OLD RATING
L'Oréal OREP.PA
Underweight
Overweight
Essity ESSITYa.ST
Underweight
Equal Weight
Puig PUIGb.MC
Equal Weight
Overweight
Henkel HNKG.DE
Overweight
Equal-Weight
Beiersdorf BEIG.DE
Overweight
-

 (Reporting by Cian Muenster)

 ((Cian.muenster@thomsonreuters.com))