Goldman Sachs upgrades Haleon stock to Buy on expected growth acceleration

Investing.com - Goldman Sachs upgraded Haleon PLC (NYSE:HLN) from Neutral to Buy and raised its price target to GBP4.40 from GBP4.15, citing expectations for accelerated organic sales growth. The consumer healthcare giant, currently valued at $43.6 billion, is trading near its 52-week low, and according to InvestingPro analysis, appears fairly valued at current levels.

The investment bank projects Haleon will achieve organic sales growth of 4.7% in fiscal year 2026 and 5.1% in fiscal year 2027, driven by stronger volume and mix-led emerging markets growth, a recovery in the U.S. market, and continued high-single-digit growth in the Oral Health segment. The company maintains a robust gross profit margin of 63.6% and trades at a P/E ratio of 21.9x, which InvestingPro data suggests is attractive relative to its growth potential.

Goldman Sachs also forecasts 130 basis points of EBIT margin expansion through fiscal year 2027, exceeding the Visible Alpha Consensus estimate of 100 basis points, primarily from faster delivery of £800 million in gross productivity savings from supply chain optimization.

The firm expects Haleon’s organic sales growth to accelerate into 2026, with 4.1% growth in the second half of 2025 and 3.9% growth in the third quarter, led by strong performance in Asia-Pacific and EMEA/Latin America regions, while North America is projected to experience a 0.8% decline due to ongoing U.S. headwinds.

By fiscal year 2026, Goldman Sachs anticipates a return to growth in North America based on improved inventory dynamics and innovation, while maintaining an optimistic outlook on growth in Asia-Pacific and EMEA/Latin America regions.

In other recent news, Haleon plc reported its financial structure, stating that as of August 31, 2025, the company had 8.96 billion ordinary shares issued, with 8.96 billion voting rights. In addition, Berenberg adjusted its price target for Haleon to $13.41 from $13.48, maintaining a Buy rating after the company’s Q2 group organic sales growth of 3.0% fell short of the 3.3% consensus expectations. Haleon also disclosed that Carl Haney, Chief R&D Officer, received conditional share awards under its Performance Share Plan and Share Value Plan, which are contingent on continued employment and performance conditions through December 31, 2027.

Furthermore, senior executives Adrian Morris and Tamara Rogers acquired shares in the company through its Share Reward Plan, purchasing 36 shares each and receiving an additional 36 matching shares at no cost. Haleon also announced the appointments of Bláthnaid Bergin to its Audit & Risk Committee and Matt Shattock to its Environmental & Social Sustainability Committee. These appointments were made in line with the UK Listing Rules. These developments reflect ongoing strategic and operational activities within the company.

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