LONDON (ShareCast) - Tempus in The Times says the trading update from Reckitt Benckiser, which has been at the heart of the discounting wars, suggests that in Europe and North America the picture may be improving. Like-for-like growth here in the third quarter was two per cent. This might not seem like much, but it compares with a one per cent fall in each of the previous two quarters. It is also rather better than seen or expected from its peers. Like-for-like growth in the first three quarters from household products was up 4 per cent, rather better than had been expected and prompting yesterday’s 3.7 per cent rise in the shares to £37.68. The shares are on an expensive 15 times’ earnings, which suggests immediate progress may be limited, but they are a strong 'hold' long-term.

Tempus points out an encouraging read-across for the AIM-listed dating site Cupid from its much larger rival in the United States, which runs match.com. There are questions about how much growth there is left for this kind of business, while Cupid, with 2% of the US market, wants to get to 10%. Numis Securities points out that match.com has reported revenue growth of 8%, which implies 'there is plenty more room in the market' for Cupid.

Handbag group Mulberry has seen its shares plunge 28% this year as fears over future growth mount as the financial crisis hits top-end buyers. This week’s profit warning gave the shares another handbagging after the company announced that it expected group revenue growth to be below market expectations and said profits would be lower than last year. Even after the recent falls, the company’s rating remains high. The shares are trading on a 2013 earnings multiple of 22.1, falling to 17. This is still discounting a significant amount of future growth. Questor in The Telegraph thinks the company has a substantial opportunity, but regards the rating as still too high. It last said avoid at £15.66 in June and the shares are now 35% lower. On valuation terms, the rating has to remain ‘avoid’.


CM

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