- Reckitt Benckiser Group
- 10 January 2025 09:25:23
Source: Sharecast
The bank lifted Reckitt to ‘overweight’ from ‘equalweight’ and upped the price target to 5,500p from 4,600p, saying it was its new "top pick" in home and personal care (HPC).
Morgan Stanley said that after several years of earnings volatility, it expects Reckitt to deliver mid single digit percentage like-for-like growth and high single digit earnings per share growth from 2025, supported by the company's ongoing buyback programme, placing it at the top quartile of EU Staples peers.
"Additionally, the potential sale of the company's Essential Home business later in the year could support further re-rating and capital return," it said. "We acknowledge risks around the ongoing litigation, but argue that is priced in at current levels, leaving the risk/reward positively skewed."
The bank downgraded Haleon to ‘equalweight’ from ‘overweight’ but lifted the price target to 410p from 400p.
It said it continues to consider Haleon a core long-term holding owing to its well-positioned portfolio in attractive categories.
"However, after a year of significant outperformance, with shares now trading at a 25% premium to EU Staples, we await a better opportunity to add," Morgan Stanley said.
At 0920 GMT, Reckitt shares were up 2.3% at 5,036p, while Haleon was down 1.7% at 376.50p.
