Street Calls of the Week
Investing.com - Barclays downgraded Haleon PLC (NYSE:HLN) from Overweight to Equalweight and lowered its price target to GBP3.80 from GBP4.30 on Tuesday. The consumer healthcare giant, currently valued at $43.46 billion, is trading near its 52-week low with a P/E ratio of 21.9x and an attractive PEG ratio of 0.5x, according to InvestingPro data.
The downgrade comes despite Barclays acknowledging several positive aspects of Haleon’s business, particularly its therapeutic oral care segment, which the firm describes as "one of the best franchises in global staples with a long runway for growth."
Barclays highlighted Haleon’s cost-saving initiatives, noting the company has already achieved a 160 basis point gross margin improvement in the first half of the year and has identified £800 million in savings between 2026 and 2030.
The rating change follows Haleon’s decision to lower its guidance in July, just one month after reaffirming its 4-6% organic sales growth target for 2025 at a June industry conference when competitors were warning about a U.S. slowdown.
This sequence of events has negatively impacted Haleon’s share price and investor sentiment, raising questions about whether the guidance reduction was sufficient and if the company can truly achieve 4-6% organic sales growth long-term.
In other recent news, Haleon has been the focus of several significant developments. Goldman Sachs has upgraded Haleon stock from Neutral to Buy, anticipating accelerated organic sales growth, with projections of 4.7% in fiscal year 2026 and 5.1% in fiscal year 2027. This optimism is driven by expectations of strong growth in emerging markets and recovery in the U.S. market. Meanwhile, Berenberg has adjusted its price target for Haleon to $13.41, maintaining a Buy rating despite slower-than-expected Q2 organic sales growth of 3.0%. In corporate activities, Haleon has granted conditional share awards to senior executives under its Performance Share Plan and Share Value Plan, with vesting conditions extending to 2028. Additionally, the company reported having 8.96 billion shares issued as of August 31, 2025, with a total of 8.95 billion voting rights. Furthermore, senior executives Adrian Morris and Tamara Rogers acquired shares through the company’s Share Reward Plan, highlighting ongoing executive investment in Haleon’s future.
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