Does Recent Brand Expansion Signal a Good Entry Point for Beiersdorf in 2025?

• Wondering whether Beiersdorf is a bargain or overpriced right now? You are not alone in seeking clarity on whether it is a smart pick at current levels.
• The stock has seen a modest rebound lately, climbing 2.0% over the last week and 1.9% for the past month. Despite this, it is still down more than 24% year-to-date.
• Recent headlines have focused on the company's strategic brand investments and global market expansions, providing much-needed optimism despite recent share price pressure. Many investors see these moves as signs that management is positioning for renewed growth in a challenging consumer goods sector.
• According to our six-point valuation framework, Beiersdorf scores a 3 out of 6 on undervaluation checks. Next, we will break down a few classic valuation methods used for stocks like Beiersdorf. Keep an eye out, as there may be an even smarter way to interpret its true worth by the end of this article.

Find out why Beiersdorf's -24.4% return over the last year is lagging behind its peers.

Approach 1: Beiersdorf Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by estimating the company's future cash flows and then discounting them back to today's value. This process aims to calculate what those future earnings are truly worth in present terms. This approach provides a grounded perspective based on the business's ability to generate cash over time.

For Beiersdorf, the latest reported Free Cash Flow (FCF) was €251 Million. Analyst forecasts predict that annual FCF will rise substantially, reaching €1.15 Billion by 2029. While analysts directly estimate up to five years out, forecasts beyond that are extrapolated, giving a picture of the company's long-term cash generation potential.

Based on these projections, the DCF model calculates Beiersdorf's intrinsic value as €134.20 per share. Compared to its current market price, this indicates the stock is trading at a 30.3% discount, suggesting that shares are notably undervalued at present levels.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Beiersdorf is undervalued by 30.3%. Track this in your watchlist or portfolio, or discover 870 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Beiersdorf.

Approach 2: Beiersdorf Price vs Earnings

For consistently profitable companies like Beiersdorf, the Price-to-Earnings (PE) ratio is a straightforward and widely respected measurement of value. The PE ratio compares a company’s share price to its per-share earnings, offering investors a clear sense of how much they are paying for every euro of profit.

The PE ratio considered fair for a stock depends on growth prospects and risk. Higher expected earnings growth or lower business risk typically justify a higher PE, as investors are willing to pay more for future profits with confidence. Conversely, slower expected growth or greater risk often calls for a more modest PE ratio compared to the market or industry benchmarks.

At present, Beiersdorf trades at a PE of 23.19x. This sits above the Personal Products industry average of 21.50x and below the peer average of 30.97x. While these benchmarks are informative, Simply Wall St’s proprietary Fair Ratio adds an extra layer of insight by taking into account Beiersdorf’s specific growth outlook, profit margins, risk profile, and market cap. The Fair Ratio for Beiersdorf is 18.02x.

Relying solely on industry or peer comparisons can mask company-specific opportunities and risks. In contrast, the Fair Ratio method delivers a more tailored perspective by factoring in everything from earnings growth to profitability and sector dynamics. This makes it a more precise way to judge whether the current valuation makes sense.

With Beiersdorf’s PE of 23.19x above its Fair Ratio of 18.02x, the shares currently appear overvalued on this metric.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1396 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Beiersdorf Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your own story or perspective on Beiersdorf, where you link the company's real-world developments and strategy to financial forecasts and ultimately to your estimate of fair value.

Narratives empower you to go beyond just the numbers by combining a company's unique business drivers, such as innovation, market expansion, and industry challenges, with assumptions about future revenue, earnings, and margins. This approach allows you to justify your outlook, reflect your convictions, and see the clear path from company story to valuation.

Accessing Narratives on Simply Wall St’s Community page makes this approach incredibly accessible, enabling millions of investors to publish, compare, and update their views with ease. Narratives automatically update as new news or earnings come in, helping you stay on top of changing market dynamics without starting from scratch each time.

By comparing your Narrative’s Fair Value with the current Price, you can make better-informed buy or sell decisions by seeing immediately if the market disagrees with your view and why. For example, one investor might expect Beiersdorf’s future earnings to surge with new product rollouts and assign a fair value of €180.0 per share, while another might be more cautious about competition and price pressure, setting a fair value as low as €98.0.

Do you think there's more to the story for Beiersdorf? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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