Henkel share: Potential thanks to higher margin

Last Updated: 4. März 2024By

Henkel stock has fallen after the presentation of the 2023 business figures with an outlook for the current year. Since the beginning of the year, the stock has been down about 7 percent, now trading at around 68 euros (as of March 4, 2024, approximately 11 am). However, the consumer goods company was able to convince overall with its numbers.

The targets for the previous year were achieved and for 2024, Henkel is planning to improve profitability. The DAX-listed company from Düsseldorf continues to rely on price adjustments while also implementing restructuring and cost-saving measures. In the current year, the margin is expected to increase significantly once again.

Henkel with figures for 2023 and 2024 Ahead of time, Henkel had planned for an organic sales growth between 3.5 and 4.5 percent and an EBIT margin between 11.5 and 12.5 percent for the 2023 fiscal year. Both targets were achieved by the company’s Consumer Brands (Persil, Pril, Schwarzkopf, etc.) and Adhesive Technologies (Pritt, Pattex, etc.) divisions. Organic sales grew by 4.2 percent to 21.5 billion euros and the EBIT margin climbed to 11.9 percent.

For the current year 2024, Henkel is particularly optimistic about profitability: The adjusted EBIT margin is expected to increase to 12 to 13.5 percent, with earnings per share lying between 5 and 20 percent above those of 2023. However, Henkel is slightly more cautious about sales, projecting an organic growth between 2 and 4 percent. The dividend will remain at 1.85 euros per share.

Henkel stock: Higher profitability could drive it The consumer goods giant Henkel is also focused on improving profitability in 2024. This year, the already significantly increased EBIT margin is expected to continue to climb. With the restructuring of the company in early 2023 into just two major segments, Henkel is able to save significantly and has now increased these savings targets even further.

In combination with price increases, the company is currently able to offset the fact that there is not much room for growth on the sales side. For investors, there are certainly long-term opportunities with Henkel stock, as higher profitability could also lead to higher prices. However, the stagnant dividend and sales development do not cause any celebration.