Jefferies cuts Henkel, forecasts weak Q3 sales amid pricing pressure
13/09/2024 08:48
** Jefferies downgrades Henkel HNKG_p.DE to "hold" from
"buy", expecting pricing pressure to hit the German consumer
goods maker's sales in Q3
** The broker expects organic sales growth for Q3 at 1.9%,
below VA consensus of 3.6%, and 2.7% for 2024, against the
consensus estimate of 3.4%
** Jefferies notes sequential pricing pressures in both
Adhesive Technologies and Consumer Brands segments, with signs
of only modest volume momentum
** Jefferies says a consistent organic sales growth of
around 3% may not happen in H2 2024, which may lead to cuts to
Henkel's margin ambition should sales evolution falter
** Consumer good makers have
faced
weak sales growth as consumers opted for brands that slowed
hike prices in an inflationary environment
** Though Jefferies expects Henkel's operating margin of
14.9% for FY 2025, roughly in line with consensus, it says the
target of about 16% by 2027 could threaten its competitiveness,
due to higher pricing and not enough advertising and promotion
(Reporting by Bernadette Hogg)
((bernadette.hogg@thomsonreuters.com))