Henkel AG & Co. KGaA (HEN) AI Stock Analysis

• Market Cap: €28.08B
• Dividend Yield: 3.1%
• Average Volume (3M): 88.76K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.54
• Revenue Growth: -1.06%
• EPS Growth: 17.22%
• Country: DE
• Employees: 47,150
• Sector: General
• Sector Strength: N/A
• Industry: Household & Personal Products
• EPS (TTM): 1.26
• Shares Outstanding: 259,795,870
• 10 Day Avg. Volume: 82,198
• 30 Day Avg. Volume: 88,756
• PEG Ratio: 5.21
• Price to Book (P/B): 1.41
• Price to Sales (P/S): 1.41
• P/FCF Ratio: 15.81
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 5.55
• Revenue Forecast (FY): €20.67B

• Rating: 68 Neutral
• Price Target: €73.00 ▲(11.62% Upside)
• Action: Downgraded Date: 03/13/26
• Date: Action: Downgraded 03/13/26

The score is supported primarily by improved profitability/returns and a conservative balance sheet, plus a reasonable P/E and ~3% dividend yield. These positives are materially offset by very weak technical momentum (oversold readings and negative trend) and soft recent revenue and cash-flow trajectory.

Positive Factors

Margin and ROE improvement

Meaningful uplift in gross and operating margins and higher ROE indicate structural improvements in pricing, cost control, and business mix. These changes increase durable earnings power and the ability to fund investment or dividends even if top-line growth remains muted over the next several quarters.

Conservative balance sheet

Low leverage provides financial flexibility to invest in R&D, M&A or weather downturns without pressuring liquidity. A conservative capital structure supports long-term resilience, lowers refinancing risk, and allows management to prioritize strategic initiatives over short-term deleveraging.

Diversified portfolio and strong brands

A diversified business across adhesives, beauty and home care with well‑known global brands reduces cyclicality and reliance on any single market. Adhesive Technologies' large revenue share plus consumer brand strength supports steady cash generation and long-term market position.

Negative Factors

Top-line contraction

Sustained revenue declines erode the base that supports improved margins and returns. Without consistent top-line growth, margin gains risk being insufficient to drive durable profit expansion, constrain reinvestment capacity, and make long-term growth targets harder to achieve.

Weakening cash-flow momentum

A downshift in free and operating cash flow reduces internal funding for capex, R&D, and dividends. Even though cash conversion remains decent, continued weakening would pressure the quality of earnings and limit strategic flexibility over the medium term.

Rising absolute debt levels

An increase in absolute debt, even with modest leverage metrics, raises the company's interest and refinancing exposure. If top-line or cash-flow trends weaken further, higher nominal debt could constrain investment choices and incrementally reduce the buffer from a previously conservative balance sheet.

Henkel AG & Co. KGaA Business Overview & Revenue Model

Company Description

Henkel AG & Co. KGaA, together with its subsidiaries, engages in the adhesive technologies, beauty care, and laundry and home care businesses worldwide. The company's Adhesive Technologies segment offers adhesives, sealants, and functional coatings for various business areas, including packaging and consumer goods; automotive and metals; electronics and industrials; and craftsmen, construction, and professional industries. This segment markets its products primarily under the Loctite, Technomelt, Bonderite, Teroson, and Aquence brands. Its Beauty Care segment provides hair cosmetics; and body, skin, and oral care products, as well as operates professional hair salons. This segment distributes its products through brick-and-mortar stores, hair salons, third-party online platforms, and direct-to-consumer channels primarily under the Schwarzkopf, Dial, and Syoss brands. The company's Laundry & Home Care segment offers heavy-duty and specialty detergents, fabric softeners, laundry performance enhancers, and other fabric care products; hand and automatic dishwashing products; cleaners for bathroom and WC applications; household, glass, and specialty cleaners; and air fresheners and insect control products for household applications. This segment markets its products primarily under the Persil, Bref, Purex, all, and other brands. Henkel AG & Co. KGaA was founded in 1876 and is headquartered in Düsseldorf, Germany.

How the Company Makes Money

Henkel generates revenue through a diversified portfolio of products and services in its three main sectors. Its Adhesive Technologies division accounts for the largest share of revenue, offering adhesives, sealants, and surface treatments for industrial and consumer applications. The Beauty Care sector generates income through hair care, skin care, and personal grooming products, leveraging strong brand recognition and consumer loyalty. The Home Care division provides cleaning and laundry products, contributing significantly to sales. Henkel's revenue model is bolstered by strategic partnerships with retailers and distributors, enabling broad market access. Additionally, the company emphasizes research and development to innovate and adapt its offerings, addressing evolving consumer trends and preferences, which further contributes to its earnings.

Henkel AG & Co. KGaA Financial Statement Overview

Summary

Profitability and returns improved meaningfully (gross and operating margins up; ROE higher) and leverage remains low (debt-to-equity ~0.18). Offsetting this, revenue declined in 2025 and free cash flow/operating cash flow weakened, tempering the quality of earnings improvement.

Income Statement

Profitability has improved meaningfully versus 2022–2023, with higher gross margin (51.1% in 2025 vs. 42.3% in 2022) and stronger operating profitability (operating margin 14.6% in 2025 vs. 9.8% in 2023). Net margin also expanded to ~9.9% in 2025 from ~6.1% in 2023, indicating better cost control and/or mix. The key offset is top-line momentum: revenue declined ~3.2% in 2025 after being roughly flat in 2024, suggesting limited growth tailwinds despite better margins.

Balance Sheet

The balance sheet looks conservative, with low leverage (debt-to-equity ~0.18 in 2025) and sizable equity relative to the asset base, which supports financial flexibility. Returns on equity have also improved to ~9.9% in 2025 from ~6.3% in 2022, consistent with the step-up in earnings quality. A watch item is the upward move in total debt from 2023 to 2025 (about €2.9B to €3.7B), though leverage remains modest overall.

Cash Flow

Cash generation is solid, with free cash flow covering a large portion of earnings (free cash flow at ~72% of net income in 2025; ~80% in 2024). However, cash flow momentum weakened: free cash flow fell ~11.4% in 2025 after being essentially flat to slightly down in 2024, and operating cash flow also declined versus 2023–2024. Overall cash conversion remains healthy, but the recent downshift reduces the quality of the improvement in reported profitability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.50B	21.59B	21.51B	22.40B	20.07B
Gross Profit	10.47B	10.82B	9.84B	9.47B	9.07B
EBITDA	3.65B	3.68B	2.80B	2.59B	2.95B
Net Income	2.04B	2.01B	1.32B	1.26B	1.63B
Balance Sheet
Total Assets	33.35B	35.27B	31.73B	33.18B	32.67B
Cash, Cash Equivalents and Short-Term Investments	3.11B	3.53B	2.17B	1.33B	2.46B
Total Debt	3.71B	4.29B	2.89B	3.59B	2.96B
Total Liabilities	12.77B	13.45B	11.73B	13.02B	12.88B
Stockholders Equity	20.49B	21.73B	19.92B	20.08B	20.80B
Cash Flow
Free Cash Flow	1.82B	2.49B	2.65B	598.00M	1.49B
Operating Cash Flow	2.52B	3.12B	3.25B	1.19B	2.14B
Investing Cash Flow	-401.00M	-2.33B	-684.00M	-323.00M	-479.00M
Financing Cash Flow	-2.18B	171.00M	-1.65B	-1.73B	-1.29B

Henkel AG & Co. KGaA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 65.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:HEN, the sentiment is Negative. The current price of 65.4 is below the 20-day moving average (MA) of 73.85, below the 50-day MA of 70.78, and below the 200-day MA of 65.97, indicating a neutral trend. The MACD of -1.00 indicates Positive momentum. The RSI at 25.78 is Positive, neither overbought nor oversold. The STOCH value of 7.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:HEN.

Henkel AG & Co. KGaA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G1A	71 Outperform	€10.29B	22.78	17.25%	2.01%	2.26%	6.49%
BEI	69 Neutral	€17.23B	21.99	10.44%	1.08%	1.83%	21.36%
HEN	68 Neutral	€28.08B	14.17	9.99%	3.10%	-1.06%	17.22%
BNR	64 Neutral	€7.09B	16.31	9.62%	4.30%	-3.35%	-23.06%
FPE3	63 Neutral	€4.13B	14.85	16.00%	3.10%	1.42%	-0.40%
EVK	62 Neutral	€6.78B	-16.23	1.08%	8.92%	-5.92%	-58.33%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%