Source: Sharecast
Berenberg noted that Reckitt's recently released FY24 showed Q424 group like-for-like sales growth of 4.6%, below visible alpha consensus expectations of 5.5%, driven by price/mix of 2.8% and volumes of 1.8%.
At the divisional level, Berenberg pointed out that hygiene achieved like-for-like sales growth of 5.5%, health was up 2.4%, and nutrition sales were 8.4% higher. Actual group sales of £3.54bn came in roughly 1% below consensus expectations but FY24 adjusted operating margins of 24.5% at the group level were well ahead of consensus forecasts of 23.3%, driving a 5% beat on adjusted operating profits.
For 2025, Berenberg forecasts like-for-like sales growth of 2.8%, down from 5.0%, an FX impact on sales of -2.1%, an adjusted EBIT margin of 25.0%, and net finance costs of £351.0m.
"Our 2025 EPS estimate is unchanged at GBP3.49. Our 12-month price target rises to 5,920p (previously 5,177p), driven by the roll-forward of our DCF model and reflection of lower bond yields (0.2% lower WACC)," said the German bank, which maintained its 'hold' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com