Beiersdorf Reports Strong First-Half Results; Growth Drivers Look Intact but Cost Inflation Looms

Narrow-moat Beiersdorf posted very strong first-half results, with revenue growth and margins ahead of our forecasts. We now expect sales growth momentum to continue in the second half of the year, but raw material inflation is likely to begin to bite soon. We are raising our fair value estimate to EUR 94 from EUR 89 to reflect the higher revenue assumptions for this year (EUR 1 of the increase) and to account for the time value of money since our last update (EUR 4). The shares, which often trade at a significant premium to the peer group due to the company’s very strong balance sheet and whitespace opportunities, appear slightly overvalued at current levels.