Reckitt’s Strong EPS Performance and Discounted Valuation Present Attractive Investment Opportunity

Analyst Rashad Kawan of Morgan Stanley maintained a Buy rating on Reckitt (RKT – Research Report), retaining the price target of p5,500.00.

Rashad Kawan has given his Buy rating due to a combination of factors influencing Reckitt’s financial performance and future outlook. The company reported a strong earnings per share (EPS) beat for 2024, driven by better-than-expected performance in both Hygiene and Nutrition segments, alongside a significant margin improvement. This resulted in an EPS that surpassed consensus estimates by 11%, indicating robust financial health.
Despite a slightly underwhelming mid-term guidance, Reckitt’s stock is trading at a discount compared to its peers, which presents a potential upside for investors. The company’s cost savings program is expected to drive adjusted EBIT growth ahead of revenue growth, further supporting the positive outlook. Additionally, Reckitt’s guidance for continued EPS growth into 2025 suggests a promising trajectory, making it an attractive investment opportunity according to Kawan’s analysis.

In another report released today, RBC Capital also maintained a Buy rating on the stock with a £57.00 price target.