Analyst David Hayes of Jefferies maintained a Hold rating on Reckitt, boosting the price target to p5,500.00.
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David Hayes has given his Hold rating due to a combination of factors including Reckitt’s impressive third-quarter like-for-like sales growth of 6.7%, which exceeded expectations by 1.3 percentage points. This growth was primarily driven by emerging markets, which saw a significant increase of 15.5%, despite challenges such as GST changes in India. The momentum in China, which accounts for 9% of Reckitt’s core sales, was particularly noteworthy, attributed to effective online execution and increased investment.
While the strong performance in emerging markets suggests the potential for achieving a sustained group organic sales growth of around 5%, which could support the company’s valuation, the overall outlook remains cautious. The Hold rating reflects a balanced view, acknowledging the positive sales momentum while considering the potential risks and uncertainties in maintaining such growth levels.
In another report released yesterday, Berenberg Bank also maintained a Hold rating on the stock with a p5,647.00 price target.