Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guides
Guidance and tools
Shares
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks Stock plan guidance
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Berenberg lowers target price on Reckitt Group
(Sharecast News) - Analysts at Berenberg lowered their target price on household goods manufacturer Reckitt Group from 5,800.0p to 5,100.0p on Thursday, citing limited visibility going forward. Berenberg noted that Reckitt's Q1 results revealed that group like-for-like sales grew by 1.5%, ahead of visible alpha consensus expectations of a -1.1% decline, driven by a price/mix of 2.0% and a decline in volumes of only 0.5%, the latter of which was significantly better than the 3.3% expected.
At the divisional level, hygiene achieved like-for-like sales growth of 7.1%, while health like-for-like sales grew by 1.0% and nutrition declined by 9.9%, better than the 14.2% drop predicted by analysts. Actual group sales of £3.73bn also came in 1% ahead of consensus.
"After six quarters of mid-single-digit volume declines, the better-than-expected volume development in Q1 will likely lead some investors to review the investment case on Reckitt. The bull case, in our view, includes the potential return to volume growth, which appears closer than it did a few months ago (we now expect volumes to turn positive in Q3 versus Q4 previously). Growth from pricing could also prove more resilient, with management taking selective price increases this year and a constructive outlook on mix as innovation platforms seem to be supporting premiumisation within the company's Powerbrands. Therefore the earnings downgrade cycle may not persist into H2 2024 as we previously anticipated," said Berenberg.
"That being said, after years of significant volatility, the bear case includes limited visibility and risk to earnings from a deterioration in the consumer backdrop, unfavourable FX and earnings-dilutive business disposals. In addition, ongoing litigation risks relating to the necrotizing enterocolitis (NEC) trials in the US, could limit any short-term stock rerating."
In addition to lowering its target price on the stock, the German bank also reiterated its 'hold' rating on Reckitt shares.
Reporting by Iain Gilbert at Sharecast.com
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity, Equity & Inclusion | Diversity, Equity & Inclusion Reports | Doing Business with Fidelity | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Staying secure | Statutory and Regulatory disclosures | Whistleblowing programme
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.
