Berenberg raises target price on Reckitt Group
By Iain Gilbert
Date: Friday 07 Mar 2025
(Sharecast News) - Analysts at Berenberg raised their target price on consumer goods giant Reckitt Group from 5,177.0p to 5,920.0p on Friday but warned of "risks on all sides" as 2025 unfolds.
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
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