Analyst Note| Diana Radu |
Narrow-moat Henkel delivered revenue growth of 6.4% for the first quarter (out of which organic sales growth was 6.6%), significantly ahead of FactSet's 3.5% consensus revenue growth estimate. Despite this relatively strong performance, management confirmed full-year organic sales growth guidance in the range of 1% to 3% for the group. Although we believe this is slightly conservative, we appreciate that there is substantial uncertainty with regard to the full-year volume and price development. Volume growth has been consistently deteriorating in recent quarters, and the strong pricing in the first quarter (12% contribution to growth) is likely to be in large part a carryover impact from the previous year's pricing actions, with further pricing likely to be more muted. We don't expect to make any changes to our 2023 forecast at this time, which is broadly aligned with the guidance, and therefore we reconfirm our EUR 82 fair value estimate.