Beiersdorf: Robust Sales Growth Leads to a Slight Fiscal 2023 Guidance Increase; Shares Expensive

Narrow-moat Beiersdorf reported solid first-quarter sales growth of 12%, ahead of the 8% FactSet consensus estimate. Within this, the brand Nivea and the dermatological segment provided standout performances, posting organic sales growth of 18% and 27%, respectively. Management increased group top-line guidance slightly to mid- to high-single-digit organic sales growth, from mid-single-digit organic sales growth previously, while EBIT margin expectations are unchanged (slightly above the previous year’s level). We don’t expect to make material changes to our full-year forecast at this time (calling for top-line growth of 4.5% and 50 basis points EBIT margin accretion compared with last year). A scenario of slightly higher top-line growth and a slightly lower margin would be broadly neutral to our valuation. We regard shares as expensive at current levels, trading in 2-star territory.