Barclays sees big haircare gains for this consumer stock as shoppers prioritize self-care
Investors are overlooking the growth potential of German consumer giant Henkel’s burgeoning haircare business as even cautious consumers continue to splurge on self-care routines, according to Barclays. Henkel, which owns brands ranging from Persil, Loctite, and Schwarzkopf, has been expanding its haircare portfolio this year, and is “still underappreciated,” Barclays analysts said in a note on Wednesday. “Yet, Henkel’s Hair business does not appear to receive the credit we think it deserves,” the analysts said. “This is because, following the restructuring of Consumer Brands, Henkel appears to be operating with greater speed and urgency, making bolder portfolio decisions and expanding beyond its historical strengths in colouration and styling into the much larger Hair Care market,” they added. HEN3-DE 1Y line Henkel’s stock over the past year. Henkel is broadly known as a global industrial products and consumer goods company with offerings such as laundry detergent, industrial products, adhesives, sealants, and haircare. In July, it completed its $1.4 billion deal to buy premium haircare brand Olaplex and in April it closed the acquisition of haircare and styling brand Not Your Mother’s . Other brands it has added to its portfolio in recent years include Vidal Sassoon and Shiseido Hair Professional business in Asia-Pacific. Barclays raised its forecasts for Henkel’s haircare growth through 2028, with growth expected to accelerate further from the third quarter of 2027. “If Henkel demonstrates that its stronger portfolio and local innovation infrastructure can translate into sustained share gains, we would be willing to turn more positive,” the analysts said. Barclays highlighted that Henkel’s consumer brands business is primarily viewed through the lens of its more mature Laundry business, despite haircare becoming the “largest and most attractive segment within the category.” Both hair and laundry care businesses make up 40% of the company’s Consumer Brands sales. “More importantly, we believe the market is still underestimating the implications of this shift. Hair is no longer a relatively small growth engine within Consumer Brands; it is increasingly becoming the centrepiece of the portfolio,” they added. Self-care trends The global haircare market is worth around 63 billion euros ($70.4 billion) and grew more than 4% yearly between 2022 and 2025, led by “increasingly sophisticated consumer hair routines,” innovation and premiumization, Barclays said. Haircare has proved a “more resilient category” for Henkel’s performance compared to laundry and homecare, partly because haircare is less raw-material intensive, making it more profitable in the long term. “Despite the challenging backdrop, particularly in Europe, we have seen little evidence of the degree of trading-down and private-label substitution observed in many household categories,” Barclays said. “We believe this reflects Hair’s greater exposure to premiumisation, innovation and self-care trends, making demand less directly linked to consumer confidence.” This harks back to the lipstick effect : consumer spending on pick-me-up items such as makeup, perfumes, and candles as they look to treat themselves in more challenging economic conditions. Barclays sees haircare as Henkel’s next big growth engine, with brands such as Olaplex and Not Your Mother’s helping it move beyond its traditional strength in hair dye and styling. It suggests Henkel will need to sell more haircare products to more consumers in more markets, with the U.S., China and Mexico offering some of the biggest opportunities. Now Henkel has to prove it can turn that bigger brand portfolio into hit products and lasting market-share gains, the analysts said.
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