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Henkel AG (HENKY)
OTHER OTC:HENKY
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Henkel AG
(OTC:HENKY)
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Rating:65Neutral
Price Target:
$20.00
▲(4.38% Upside)
Action:DowngradedDate:03/15/26
The score is driven by solid fundamentals (improved profitability, conservative leverage, positive free cash flow) and very attractive valuation (low P/E with a dividend). These positives are tempered by weak technicals (price below key moving averages, negative MACD, oversold RSI) and mixed near-term signals (uneven revenue/cash flow and ongoing pricing/market pressures despite maintained guidance and cost-savings execution).
Positive Factors
Diversified, market-leading business mix
Henkel's three-segment model—with Adhesive Technologies as the largest revenue contributor and strong consumer brands—creates durable diversification. Industrial exposure (electronics, industrials) anchors B2B revenue, while consumer brands provide retail resilience, reducing single-market cyclicality and supporting steady cash flows.
Sustained margin improvement
Material margin expansion in 2023–2024 reflects pricing, cost discipline and mix shift toward higher-margin Adhesive Technologies. Higher gross and net margins improve earnings quality and recurring cash generation, enhancing the firm's ability to fund R&D, dividends and strategic M&A over the medium term.
Conservative leverage and balance-sheet flexibility
Low debt-to-equity gives Henkel financial flexibility to pursue bolt-on acquisitions, execute share buybacks and absorb cyclical downturns. Conservative leverage supports investment in integration (Consumer Brands merger) and innovation without forcing deleterious asset sales or excessive refinancing risk during stressed markets.
Negative Factors
Uneven revenue and top-line decline
A meaningful revenue drop and persistent choppiness undermine predictability of growth and the scalability of investments. Weak top-line momentum constrains margin leverage, complicates medium-term planning for R&D and marketing, and raises execution risk for initiatives that depend on sustained organic growth.
Volatile free cash flow
Periodic operating cash-flow swings and a notable FCF decline in 2025 weaken the reliability of internal funding. Volatility in cash conversion can limit the firm's capacity to consistently fund dividends, buybacks and capex without altering capital allocation or increasing external financing over a multi-quarter horizon.
Structural pressures in key end-markets
Persistent pricing headwinds in consumer laundry, rising private-label share, and a muted automotive sector reduce volume and margin upside in core segments. These secular and cyclical pressures can erode brand pricing power and industrial demand, limiting sustainable organic growth and margin expansion.
Henkel AG (HENKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.17B
Dividend Yield2.04%
Average Volume (3M)8.81K
Price to Earnings (P/E)13.8
Beta (1Y)0.29
Revenue Growth-0.51%
EPS GrowthN/A
CountryUS
Employees47,150
SectorConsumer Defensive
Sector Strength42
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)1.90
Shares Outstanding1,039,183,500
10 Day Avg. Volume0
30 Day Avg. Volume8,812
Financial Highlights & Ratios
PEG Ratio-9.47
Price to Book (P/B)1.32
Price to Sales (P/S)1.37
P/FCF Ratio15.40
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue1.39
Enterprise Value/Gross Profit2.73
Enterprise Value/Ebitda8.47
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.59
Revenue Forecast (FY)$23.86B
Henkel AG Business Overview & Revenue Model
Company DescriptionHenkel AG is a global leader in consumer and industrial products, headquartered in Düsseldorf, Germany. The company operates through three main business sectors: Adhesive Technologies, Beauty Care, and Home Care. Henkel's diverse portfolio includes well-known brands such as Persil, Schwarzkopf, Loctite, and Pritt, which cater to both retail and professional markets. With a strong emphasis on sustainability and innovation, Henkel develops products that enhance the quality of life and improve efficiency across various applications.
How the Company Makes MoneyHenkel generates revenue through its diverse product offerings across three primary sectors. The Adhesive Technologies segment is the largest revenue contributor, providing industrial adhesives, sealants, and surface treatments to a range of industries, including automotive, electronics, and packaging. The Beauty Care segment includes hair care, skin care, and personal hygiene products that are sold through retail channels. Home Care focuses on laundry detergents, household cleaners, and dishwashing products. Henkel’s revenue model is bolstered by strong brand recognition and market presence, along with significant partnerships with retailers and distributors worldwide. Additionally, the company invests in research and development to innovate and enhance product efficiency, which helps maintain competitive advantage and drive sales growth.
Henkel AG Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in Electronics and Industrials, successful early completion of the Consumer Brands merger, and positive sales growth in North America. However, these were offset by pricing pressures in Consumer Brands, challenges in the Automotive sector, and a negative market environment for laundry products. The sentiment is balanced with notable achievements and ongoing challenges.Q3-2025 Updates
Positive Updates
Strong Performance in Electronics and Industrials
Adhesive Technologies showed positive price and volume development, supported by Electronics & Industrials, with Electronics Solutions expected to show high single-digit market growth in coming years.
Consumer Brands Merger Ahead of Schedule
The Consumer Brands merger is in its final stages, expected to conclude a year ahead of schedule, with anticipated net savings of at least EUR 525 million by end of the year.
North America Organic Sales Growth
North America stood out with good organic sales growth, supported by both business units, contributing positively to overall company performance.
Successful Brand Innovations in Laundry Care
Persil and Perwoll delivered positive growth with innovations like Persil Giant Discs and Perwoll's triple renew technology driving market share gains.
Negative Updates
Pricing Pressure in Consumer Brands
Consumer Brands experienced negative pricing in the third quarter, particularly in Laundry in Europe, reflecting a challenging market environment.
Challenging Market Environment in Automotive
Adhesive Technologies faced muted performance in the Automotive sector, with no significant improvement expected in the near term.
Overall Negative Market in Laundry
The overall market for laundry products was negative, impacted by consumer sentiment and a shift towards private labels, particularly in Europe.
Company Guidance
In the Q3 2025 results conference call, Henkel reported strong performance with a clear acceleration in top-line development, achieving organic sales growth of 1.4%. The Adhesive Technologies division recorded a 2.5% increase in organic sales, supported by strong performances in Electronics and Industrials, while Consumer Brands achieved positive volume growth, particularly in Hair Care. The company executed around EUR 700 million in share buybacks by the end of October. Despite a challenging economic environment, Henkel maintained its full-year guidance, expecting both adjusted EBIT margin and adjusted EPS growth at constant currency to remain well within the current outlook ranges. The Consumer Brands merger is on track to conclude by year-end, a year ahead of schedule, with expected net savings of at least EUR 525 million by the end of 2025.Henkel AG Financial Statement Overview
Summary
Margins improved notably in 2023–2024 (gross margin ~45% to ~50%; net margin ~6% to ~9%) and leverage is conservative (debt-to-equity ~0.15–0.20). Offsetting this, revenue has been uneven with a meaningful decline in 2025 (~-7%) and cash flow shows volatility, including weaker 2025 free cash flow (~-15%).Income Statement
Profitability improved materially in 2023–2024, with gross margin expanding (about 45% in 2023 to ~50% in 2024) and net margin rising (~6% to ~9%), supporting stronger earnings despite a largely flat revenue base. However, 2025 revenue declined meaningfully (about -7%), and the business has shown choppy top-line momentum over the period, which limits confidence in near-term growth durability.72
Positive
Balance Sheet
Leverage appears conservative for the category, with debt-to-equity around ~0.15–0.20 in 2020–2024, providing balance sheet flexibility. That said, equity and assets dipped in 2025 versus 2024, and returns on equity have been solid but not exceptional (roughly mid-single digits to ~9%), suggesting steady—rather than accelerating—value creation.74
Positive
Cash Flow
Cash generation is generally healthy, with free cash flow consistently positive and typically covering a large portion of earnings (about 70–80% in 2020–2024). The key weakness is volatility: operating cash flow dropped sharply in 2022 and, more recently, 2025 free cash flow fell (about -15%), indicating periodic working-capital or cash conversion pressure.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 19.69B | 21.59B | 21.51B | 22.40B | 20.07B |
| Gross Profit | 10.06B | 10.82B | 9.66B | 9.37B | 8.97B |
| EBITDA | 3.51B | 3.68B | 2.92B | 2.69B | 3.23B |
| Net Income | 1.95B | 2.01B | 1.32B | 1.26B | 1.63B |
Balance Sheet | |||||
| Total Assets | 33.33B | 35.27B | 31.73B | 33.18B | 32.67B |
| Cash, Cash Equivalents and Short-Term Investments | 3.11B | 3.53B | 2.19B | 1.40B | 2.46B |
| Total Debt | 3.71B | 4.29B | 2.89B | 3.58B | 3.44B |
| Total Liabilities | 12.76B | 13.45B | 11.73B | 13.02B | 12.88B |
| Stockholders Equity | 20.49B | 21.73B | 19.92B | 20.08B | 19.71B |
Cash Flow | |||||
| Free Cash Flow | 1.75B | 2.49B | 2.65B | 654.00M | 1.49B |
| Operating Cash Flow | 2.42B | 3.12B | 3.25B | 1.25B | 2.14B |
| Investing Cash Flow | -385.17M | -2.33B | -684.00M | -217.00M | -479.00M |
| Financing Cash Flow | -2.10B | 171.00M | -1.65B | -1.89B | -1.29B |
Henkel AG Technical Analysis
Negative
19.16
Price Trends
20.64
Negative
19.82
Negative
19.23
Negative
Market Momentum
-0.87
Positive
21.39
Positive
0.47
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HENKY, the sentiment is Negative. The current price of 19.16 is below the 20-day moving average (MA) of 20.27, below the 50-day MA of 20.64, and below the 200-day MA of 19.23, indicating a bearish trend. The MACD of -0.87 indicates Positive momentum. The RSI at 21.39 is Positive, neither overbought nor oversold. The STOCH value of 0.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HENKY.
Henkel AG Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $335.31B | 20.05 | 31.23% | 2.92% | 1.23% | 17.97% | |
69 Neutral | $133.94B | 20.76 | 26.01% | 3.74% | -0.30% | -14.60% | |
68 Neutral | $33.35B | 22.42 | 13.94% | 4.85% | -2.94% | 34.54% | |
65 Neutral | $30.17B | 13.81 | 10.04% | 2.04% | -0.51% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $68.23B | -429.64 | 431.59% | 2.67% | -0.05% | 2.49% | |
61 Neutral | $32.59B | 16.63 | 155.28% | 5.03% | -10.04% | -23.41% |
* Consumer Defensive Sector Average
HENKY
Henkel AG
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.