Beiersdorf - less than clear Technical analysts must love Beiersdorf. The shares mostly traded in a €40 to €45 range through 2010 and 2011 but, since passing through the top of that in January this year, they have shot up to €60 and are still rising. Things are not quite so clear cut when it comes to the fundamentals. The German company derives most of its sales from consumer goods - Nivea is its big brand - and within consumer goods, almost two-thirds of sales are in Europe. Hardly the basis for a high-growth business. Yet the shares trade on 28 times forecast earnings. That is partly because Beiersdorf has developed a habit of surprising investors with good news. In August it increased its margin forecast for the year. In November it increased its sales forecast. Last week, it increased its sales forecast again - expectations for revenue growth this year have gone up from 3 per cent in October to over 4 per cent now. The company's own restructuring plan might have something to do with it. But somebody, somewhere is really loading up on Nivea. While forecast upgrades make wonderful short-term reading for the bulls, there is something mildly disconcerting about it all. At 3 per cent sales growth and an 11 per cent margin, operating profits would be €638m. At 4 per cent sales growth with a 12 per cent margin, the operating profit for 2012 would be €703m. If there is a €65m margin of error on the upside, then presumably there is the same on the downside. The problem is that there is little room for error in Beiersdorf's market rating. It sits at the top of the consumer goods sector - Unilever, Procter & Gamble, Reckitt Benckiser and L'Oréal trade at an average 36 per cent discount. Beiersdorf is not as liquid as the others - Maxingvest, a German family-owned coffee company, owns a 51 per cent stake. That explains some of the premium. But the company will have to keep delivering nice surprises to justify its rating. Not that technical analysts will care.