Beiersdorf AG shares declined on Wednesday following a downgrade from Deutsche Bank, which moved the consumer staples group from Hold to Sell. The stock fell 1.5% to €75.38 and was lagging the broader German market, with the DAX down roughly 0.5% in early European trading.
In a wider review of European consumer staples, Deutsche Bank made several other rating and target changes. The bank cut Danone to Sell and reduced its target to €61 from €63, and trimmed Haleon’s target to 320 pence from 335 pence. Conversely, Deutsche Bank upgraded Henkel to Buy and raised its target to €81 from €76, and increased its target for The Magnum Ice Cream Company to €15.5 from €13.5.
Despite the downgrade on Beiersdorf, Deutsche Bank preserved a €70 price target for the stock in its European Consumer Staples research note. Analyst Tom Sykes highlighted that European staples shares are trading at their weakest relative level to the broader market in 18 years, and the bank continues to expect the sector to underperform.
Deutsche Bank flagged two central pressures on the sector. First, it expects consumer wallets to expand more slowly than nominal gross domestic product, a dynamic the bank says will weigh on earnings and valuations for staples companies. Second, the bank pointed to rising structural pressure and intensifying competition across categories.
A focal point of the bank’s concern is a channel shift affecting home and personal care as well as food companies. Deutsche Bank identified Amazon and Costco, and to a lesser extent Walmart, as key drivers of category growth in the U.S. that are pressuring traditional drug channels and increasingly challenging grocery outside Walmart. The bank warned this shift in where consumers buy could reduce "sell-in" rates relative to actual consumer purchases, making it cautious about investment cases that rely on a U.S. market rebound. It also said the purchasing-channel shift is likely to become a more global phenomenon over time.
The downgrade of Beiersdorf was presented as part of the bank’s broader reassessment of European consumer staples dynamics.
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