Berenberg lowers target price on Reckitt Group
Reckitt Benckiser Group
4,914.00p
09:45 09/01/25
Analysts at Berenberg lowered their target price on consumer goods company Reckitt Group from 8,500.0p to 7,870.0p on Wednesday, stating effects stemming from the Covid-19 pandemic had made their mark on the firm.
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Berenberg said "challenging comparables", social mobility and input cost pressures had taken their toll on Reckitt's performance in the second quarter, with like-for-like sales declining 1.0%, missing consensus expectations for an increase of 1.9%.
The German bank noted that the miss was driven by declines in the firm's health and nutrition divisions and below expectation operating margins of 21.6%. Adjusted earnings per share of £1.42 also missed consensus expectations by 2%.
Berenberg, which reiterated its 'buy' rating on the stock, added that Reckitt's results did not invalidate its investment thesis on the firm, which was based on improved execution and 3.9% organic sales growth in the medium term.
"We accept however, the near-term risk of stock volatility, at least until the base (ie post-Covid-19 levels of consumer demand for key categories) is better understood," concluded the analysts.