Reckitt Benckiser upgraded to 'overweight' at Morgan Stanley
Reckitt Benckiser has had its rating raised to ‘overweight’ from ‘equalweight’ over at Morgan Stanley, as the stock is “one of the best risk/rewards” in the home and personal care sector.
FTSE 100
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Reckitt Benckiser Group
4,478.00p
09:55 24/04/24
Morgan Stanley said that’s because of the launch of the Reckitt’s cost saving program, dubbed as ‘Supercharge’. The programme is an engine of sales and EBIT growth to 2017, said Morgan Stanley. “The market underestimates the potential for Supercharge to drive both top-line and EBIT growth from 2015, we argue,” said the bank.
“We expect the organisational streamlining that Supercharge entails to boost top-line growth as Reckitt better leverages scale with larger, more rapid innovation,” add Morgan Stanley.
The bank retained its 6300p target price on the stock, saying that with the home and personal care sector having seen a significant re-rating, Reckitt recent relative underperformance creates an attractive entry point ahead of strong earnings delivery in 2015 and 2016.
“We are now more confident about Supercharge's delivery and raise our EPS estimates by around 3-4% from 2015, which takes 2015-17 compound annual growth rate to 8%+ and puts us around 5% ahead of consensus in 2015-16,” added Morgan Stanley.