Beiersdorf Delivers Strong First-Half Results but Warns We Haven’t Seen the Last of Cost Inflation

With gradually accelerating pricing and benefiting from a currency windfall, we now expect a much stronger top-line delivery for narrow-moat Beiersdorf in 2022. The company posted a strong 15.5% revenue growth for the first half of the year, coupled with a 100-basis-point improvement in operating margin as a result of cost leverage. Following the announcement, we increase our organic revenue growth forecast for the consumer segment to 10% from 6% earlier, while reflecting in our forecast the currency benefit. This leads us to raise our fair value estimate by 6% to EUR 90. Even after our bump in our fair value estimate, we still believe the market is overvaluing Beiersdorf, whose shares typically trade at a significant premium to the peer group due to the company’s very strong balance sheet.