Analyst David Hayes of Jefferies maintained a Hold rating on Henkel AG & Co. KGaA (0IZC – Research Report), retaining the price target of €91.00.
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David Hayes has given his Hold rating due to a combination of factors, primarily focusing on Henkel AG & Co. KGaA’s strategic divestment decisions. Henkel is planning to offload its private label sales in the U.S., a move that represents about €500 million in sales, which is approximately 20% of their North American Laundry and Homecare sector. While this divestment might initially appear to reduce Henkel’s income, it is expected to have minimal impact on profits, suggesting that these operations were not significantly contributing to the company’s bottom line.
By finalizing these divestments, Henkel is positioning itself for a potential operational margin recovery, targeting around 16% by 2025. However, the complete impact of these restructuring efforts remains to be seen, as the company still needs to finalize the right-sizing of its divisions over the next two years. This combination of strategic shifts and the uncertainty about their full impact on the company’s future performance has led David Hayes to maintain a Hold rating for the stock.
In another report released on February 5, Bernstein also maintained a Hold rating on the stock with a €94.92 price target.