The stock of the “Nivea” company for long has been an unspectacular, almost quiet compounder inside the Dax. Barely anyone talked about it, except maybe in the context of a mean management that was reluctant to raise the dividend for many years. Shares nonetheless performed well, offering a defensive and stable pick with solid returns for investors. Unfortunately, this has come to a spectacular end — shares have lost 50% from their high. Is this now a good opportunity to load up?
Summary and key takeaways from today’s Weekly
– Beiersdorf on the surface is one of the most defensive stocks in the German Dax.
– Its stock dropped more than 50% from its high two years ago.
– Unfortunately, this is well deserved and the stock still does not look cheap enough.
It took a while, but not even Beiersdorf (ISIN: DE0005200000, ticker: BEI) was able to stay away from the sell-out of seemingly defensive consumer stocks.
This is the more surprising, because Beiersdorf, unlike most of its peers in the sector, has absolutely no debt worries, as I will show in my analysis. To the contrary, the balance sheet has a big net cash position.
Yet, the once unthinkable happened: BEI stock collapsed.
Down 50% from its high two years ago, a brutal double-digit hit in reaction to the full-year results for 2025, and ongoing selling to this day are not what defensively oriented investors were seeking and expecting from this consumer business.
Quality has its price was the mantra for long. And indeed it has a price — investors who ignore valuations sooner or later get their lesson. I am not making fun of anybody, but talking from personal experience.
Beiersdorf stock now has a forward PE ratio of 16x — the lowest I can ever remember.
Is now the right moment to strike?
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per 29 April 2026 market close – since August 2022
Defensive business ≠ defensive stock
This headline expresses what investors should absolutely be aware of.
While behind every stock there is a business (of whichever quality), not every defensive business automatically offers defensive, low-risk investments.
I think the “low-risk” component here is the important one.
People, especially in mainstream media and fund management, often define risk as volatility, i.e. the fluctuation of a security. In my view, this is utter nonsense.
At times, it can be right, but it falls short, leaving out a few things. In that sense, tech stocks would have been / are riskier than defensive names like Beiersdorf, but also many other consumer stocks. We know how that ended over the last years…
The business model is not part of this ”risk assessment” — valuations aren’t either.
You can have all kinds of businesses, good or bad, profitable or not, high-growth or non-growing, highly indebted versus pristine balance sheets — all trading for different valuations.
It all depends on the market’s expectations.
Even if you buy stock of a high-quality, defensive business with strong margins, and no debt, you can still end as a bag holder with a bad deal from an investment perspective.
Beiersdorf in the past has practically all the time been an extremely expensive stock. I often heard this nonsense of “quality has its price”. I am saying deliberately nonsense, because one cannot ignore valuations. Investors can be lucky for long, but as soon as market expectations / psychology shift, stocks can go through a brutal rerating.
And this is what happened with Beiersdorf.
It is a defensive consumer business. Its brands Nivea, Tesa, Eucerin and others are well known. The stock most of the time traded far north of 20x future earnings — growth already priced in. Already lofty 24–25x were the bottom on many occasions, while 30x and more were no outliers.
Until it became a bottomless barrel.
As of writing, we’re significantly below 20x.
16.7x precisely.
For more than a year now, Beiersdorf trades below the level that previously represented the low-end range of the historical valuation. Compared to former multiples, this almost instantly seems to be a no-brainer buy.
I hear them calling “the stock is so cheap”.
But is it?
Dip buyers are scratching their heads.
Why does Beiersdorf continue to fall, and when does it stop?
To make it clear, we are not talking about a minor dip — the stock fell to where it was 13 years ago. Slowly up, but rapidly down. You will see that until 2024, the stock climbed higher, especially with a noticeable boost after 2022. Since then, it has been falling. On the right end of the chart, there’s a harsh drop down — this was the reaction to full-year 2025 results and 2026 guidance.
Longer-time readers know that this question (“is the stock cheap now?”) cannot be answered without more information. A low PE ratio sounds nice on paper, but it does not say anything about the company’s balance sheet (debt) or how its business is doing operationally.
It is a static figure — but we need dynamics.
Personally, I am very cautious with such historical comparisons. I prefer to take a holistic view of the business and its prospects and do as if either no past existed at all or at least historical information wasn’t there. This helps to not get fooled by biases, making you craft an investment thesis based on what happened in the past.
Everyone knows investing is about the future.
Theory and practice — in theory, there is no difference.
But in investing practice, there clearly is.
I already teased that Beiersdorf has a strong balance sheet, so let’s quick-check it, as this is not the issue for the horrible performance of the stock.
2.3 billion EUR in net cash, the highest level ever.
In comparison to the market cap of 15.5 billion EUR, this is quite a lot, pushing the enterprise value down towards 13 billion EUR. Most consumer stocks show the opposite — high leverage that increases the enterprise value, making cheap-looking PE ratios much more expensive on an enterprise value level.
But what do we get for this solid-looking Beiersdorf price tag?
Coming straight to the point — a challenged business. Sales got boosted during the last big inflationary shock in 2022, but else were not really high, making an earnings multiple above 25x hard to justify.
But more important is the most recent pace.
Growth evaporated (which inflation-adjusted is real shrinkage).
With the exception of the crisis year 2020, this is the lowest growth print over the last ten years. For me, it is only logical that the stock fell from lofty expectations and valuations.
One can debate how much is appropriate. We will try to answer that soon.
But practically since 2021, stepping over the inflationary push of 2022 which was mainly pricing-driven, sales growth has been falling for years now. The company has been growing less and less on the top line.
What about earnings?
Gross margins have been falling since at least 2016 (my data reaches back only until then), indicating there have been some underlying issues for almost a decade. At least minor ones. Then in 2021 and 2022 when inflation hit, costs rose dramatically while price hikes occurred on a delayed basis (leading to a margin recovery thereafter, though negatively impacting sales growth).
But last year, with inflation cooled down, gross margins dropped again.
A layer below, the picture is even worse.
Operating margins have not only fallen steeper, but have been doing so for longer.
In other words, the weak top line growth was accompanied by even weaker growth of operating earnings.
Last year, in 2025, operating earnings were below those achieved in 2024, and on par with 2023. Maybe this makes it clearer why the market was not in a good mood with the stock.
In that sense, 2025 was the worst year from a performance perspective over the last ten years — again, ignoring the disruptions of 2020.
This might be already a sufficient explanation or justification for the weak share price performance. However, and as shown below, cash flow is the lowest over the last ten years. Even I was surprised to see it on this scale as I do not cover Beiersdorf closely.
It truly collapsed last year, mainly as the result of higher working capital, but also weaker earnings of course as seen above.
Nonetheless, on the bottom line, this a very weak operational development.
And not just a minor hiccup.
Yes, some investors will hide behind last year’s tariff doldrums.
Maybe squeezing in some modest consumer cautiousness. But weren’t these businesses like Beiersdorf meant to benefit from weak consumer environments, respectively be relatively robust, let’s put it this way? Why have margins been falling for a decade, if these are just small short-term challenges?
I agree that a weak consumer environment plays a role. Likely, the major role.
But not because people now suddenly wash and cream their faces less often. Again, as is the case with many consumer companies, we need to come back to the topics of cost-of-living crisis and brand fragility.
Not strength — fragility.
I have often made the point that consumer brands should better not be judged by their past performance, and strength taken for granted. Only because our grandparents used Nivea cream, does not mean it will grow or even exist forever. Personally, I have some Nivea after shave balms here. But they are replaceable. There’s absolutely no moat.
Consumers come and go. Tastes change.
Especially in light of an abundance of offerings to choose from. Private-label brands, but also cheaper international alternatives have increased competitive pressure immensely.
Paired with tighter consumer budgets, what was once seen as “strong brands”, has turned into a highly questionable view. I know that I am repeating myself ad nauseam for many readers, but this is critical to better understand what’s happening.
The thing is, the weak development might have been just the beginning.
Now, it is not a no-growth story anymore, but growth flipped strongly negative.
This puts the fair-value and valuation-multiples discussion on an entirely different level. When earnings and cash flow expand, a valuation premium is justified as growth gets priced in.
When growth turns negative and margins fall, the opposite applies.
Negative growth, like in this case, does not deserve a high multiple. The deciding question is only, will this be a short-lived bump in the road, or will Beiersdorf suffer longer? To find an answer, I went through the last conference call.
Beiersdorf delivered a challenging but fully anticipated Q1 2026 — it was guided this way with full-year results in February, which sent the stock down ~~20% in one day.
Organic sales as shown above were —4.6%, with the core brand Nivea (—7%) having performed extremely weak. According to management, headwinds came from tough comparables to last year, trade disruptions, and portfolio rebalancing efforts.
They talked about early market share gains for Nivea amid a broadening of offerings towards body and deodorants, reducing reliance on face care, plus targeting the mass market more intensively through more accessible price points. And about premiumization like almost any other producer of branded products.
Early signs year-to-date (i.e. including the early Q2) were said to be strong, positioning the company for a clear return to growth in the second half of 2026, driven by a robust China business.
So far, so good.
The market does not seem to believe it — I don’t either.
I would not be surprised if now the geopolitical situation turns into a welcome cover for operational issues. Inflation will rise again, the question is only how high and for how long. But consumers will feel the pressure, which is not good for companies with branded products like Beiersdorf. The times of relentless passing of higher costs to consumers is over. Most companies CANNOT do that without losing business.
I expect rising costs to bite into margins, postponing hopes for a recovery.
If they continue to show negative growth figures, which is possible with falling margins and by targeting “more accessible price points”, due to lower margins, the current multiple of 16x earnings quickly jumps higher (when the share price stay the same).
In other words, for the stock to become cheaper, it needs to fall stronger than earnings and cash flow do. Else, falling results make the valuation more expensive again.
A few words about capital allocation.
The chart shows that Beiersdorf for years had paid always the same dividend, annoying many shareholders. The company clearly earned more, and excess cash was used here or there to buy other companies.
In the last years, coincidentally when the stock was at its top, buybacks started (when they made the least sense) and the dividend was hiked.
This is absolutely not what I want to see.
Taking everything together, this case is not jumping at me. I can imagine the stock continuing to fall, especially if the recovery does not materialize.
16x earnings sound low and might be tempting for such a defensive business.
But I do not believe in this brand-strength nonsense. It works only in good times for most companies. The other thing is, on a free cash flow basis, the stock is much more expensive. FCF should be between 500–600 million EUR, when working capital normalizes and Beiersdorf manages to stabilize.
This results in an EV / FCF multiple of more than 20x, give or take.
Too much for me, offering no margin of safety.
What I am not doing is believing in a miraculous recovery out of nowhere and a return to former excessive multiples. Unfortunately, in my perception this is exactly what many investors are doing from what I observe in twitter posts and comments.
“Investing for the long-term” can turn into a long-term torture when the underlying business does not perform. Beiersdorf stock looks cheap, but it is not dirt-cheap, especially on a free cash flow basis, and there are still risks that should not be ignored.
Maybe for the watchlist, but not more at this stage.
Conclusion
Beiersdorf on the surface is one of the most defensive stocks in the German Dax.
Its stock dropped more than 50% from its high two years ago.
Unfortunately, this is well deserved and the stock still does not look cheap enough.
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