On Thursday, Bernstein analysts raised the price target for Reckitt Benckiser Group PLC (LON:RKT:LN) (OTC: RBGLY), increasing it to GBP55.00 from the previous GBP53.00, while maintaining a Market Perform rating on the stock.
The adjustment follows a previous downgrade by the firm in November, with the analysts stating their perspectives have largely remained the same since that time. The new price target reflects a revised enterprise value to EBITDA (EV/EBITDA) multiple of 10.6x, down from 11.7x, applied to an increased forward twelve-month plus one (NTM+1) EBITDA estimate of GBP 4,128.
Bernstein's analysts highlighted potential upside risks for Reckitt, including possible positive outcomes from litigation settlements or mergers and acquisitions (M&A) activity, particularly from the divestiture of non-core homecare segments. Nonetheless, they expressed concern over the recent performance of Reckitt's core business, which has shown weakness in recent scanner data.
The report pointed out that the focus of both investors and management on litigation and M&A could be detracting from the necessary attention to the company's underlying business operations. The analysts emphasized the importance of not overlooking the fundamental aspects of Reckitt's performance amidst external factors.
Reckitt Benckiser's updated price target is based on the firm's analysis and the application of industry-standard financial metrics. The Market Perform rating suggests that the analysts anticipate the company's stock to perform in line with the broader market expectations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.