HENOF - Henkel: Turnaround Not Priced In Still Cheaper Than Peers And History

• Henkel is a German conglomerate with the global #1 industrial adhesives business and solid consumer brands in beauty, home and laundry.
• The company has been in a turnaround since the start of 2020, after too much acquisitions and cost cuts, and not enough investments.
• The turnaround aims to return Henkel to mid-to-high single-digit EPS growth. We believe this will succeed; sales already rebounded in Q1.
• Shares remain a quarter below their 2017 peak and offer a dividend yield of 2.0%. The dividend has never been cut since the 1985 IPO.
• With shares at €94.66, we expect an exit price of €131 and a total return of 44% (11.1% annualized) by 2024 year-end. Buy.

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