Henkel AG's stock traded 0.3% higher on Thursday, but the advance was trimmed as the market awaited the company's fiscal 2025 results. Ahead of that release, Morgan Stanley issued a cautionary note, saying it expects Henkel to present a subdued outlook for fiscal year 2026 organic sales growth when it publishes its fiscal 2025 results the following morning.
The investment bank outlined several potential pressures on Henkel's top-line outlook for FY26. In the company's Adhesives division, Morgan Stanley referenced forecasts from the S&P IPX industrial production index that foresee only 2.0% growth in 2026, while light vehicle production is projected to fall by 0.4% over the same period. These industrial metrics are cited as constraints on demand for adhesive products.
Morgan Stanley also pointed to softer signals from peers. Tesa has guided for flat to slightly growing organic sales in fiscal 2026, and Arkema provided muted guidance, both of which the bank views as corroborating a less robust environment for adhesive and industrial-related sales.
Another concern flagged was the potential for higher gas prices to weigh on industrial activity. The bank suggested that rising gas costs could slow industrial production, dampen demand in Henkel's Adhesives business and perpetuate input-cost inflation, creating dual pressures on volumes and margins.
In Henkel's Consumer Goods segment, Morgan Stanley highlighted intensified promotional activity in European autodish categories. The bank cited Reckitt's recent report, which emphasized competitive pressures in those categories. Both Procter & Gamble and Reckitt indicated flat to low single-digit category growth in Europe, and Nielsen data referenced by Morgan Stanley shows that Henkel has been losing market share in relevant categories.
Turning to the U.S. laundry market, Morgan Stanley noted that Procter & Gamble expects promotional volumes to rise, a signal the bank interprets as limiting Henkel's pricing power in 2026. Nielsen figures included in the bank's note indicate ongoing share losses for Henkel in the laundry category, with particular weakness observed in February.
Finally, Morgan Stanley underscored Henkel's regional exposure. The group's IMEA division - covering India, the Middle East, Africa and Turkey - accounts for roughly 10-11% of group sales, a concentration the bank highlighted as an area of sensitivity.
Market context - The bank's combination of industrial growth forecasts, peer guidance and consumer category dynamics underpins its warning of ‘‘mounting’’ guidance risks for Henkel into fiscal 2026, according to its note ahead of the results announcement.