JP Morgan downgrades Reckitt Benckiser after strong run in share price

Analysts at JP Morgan downgraded their recommendation on shares of Reckitt Benckiser, arguing that the boycott on its goods in South Korea would weigh on the group´s rate of growth in like-for-like sales.

To take note of, the broker shifted its stance following a strong run in the stock price over the intervening ten months, during which time the company´s shares widened their premium versus its global peers.

Indeed, the team of analysts led by Celine Pannuti said it still believed in the consumer goods giant´s "strong business fundamentals".

In particular, the analysts noted the 360 basis point step-up in the company´s margins since 2013.

Nevertheless, underlying momentum was expected to take a hit, with growth in like-for-likes slowing to 4.0%, limiting earnings upside.

"Barring any M&A, a further relative re-rating to the peer group may be difficult to achieve. We downgrade to Neutral [from 'overweight'] and move to the sideline for a better entry point," they said.

JP Morgan also set an end-2017 target price of 7,000p, versus its previous December 2016 target price of 7,150p.