Company Reports

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the remaining US-focused infant nutrition business will likely be carved out once the uncertainty around the ongoing premature infant formula litigation is resolved. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag on the company’s mid-single-digit growth ambitions.

Reckitt's like-for-like sales growth accelerated to 4.7% in the second quarter, up from 0.6% in the first quarter, driven by both the core portfolio and Mead Johnson Nutrition. Full-year guidance was maintained, and shares rose 5% on July 29.

Reckitt reported modest 0.6% like-for-like sales growth in the first quarter, with the core portfolio up 1.3%, below the company-compiled consensus and substantially decelerating sequentially, however, 2026 guidance was confirmed. Shares fell 6% intraday on April 22.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the remaining US-focused infant nutrition business will likely be carved out once the uncertainty around the ongoing premature infant formula litigation is resolved. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag on the company’s mid-single-digit growth ambitions.

Reckitt reported 5.4% like-for-like sales growth in the fourth quarter, with the core portfolio up 5.9%, ahead of guidance and the company-compiled consensus. 2026 guidance is consistent with Reckitt’s midterm target of 4%-5% organic sales growth. The shares fell 7% intraday on March 5.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the remaining US-focused infant nutrition business will likely be carved out once the uncertainty around the ongoing premature infant formula litigation is resolved. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag on the company’s mid-single-digit growth ambitions.

Reckitt Benckiser delivered strong 7% like-for-like sales growth in the third quarter, with 6.7% organic sales growth for its core portfolio. Full-year guidance was maintained, and shares were broadly flat in early trading on Oct. 22.

Reckitt Benckiser reported a strong set of first-half results, with organic sales growth of 4.2% and adjusted EBIT margin of 25.9% for the core portfolio, ahead of company-compiled consensus of 3.3% and 25.2%, respectively. Full-year guidance was raised, sending shares up 10% on July 24.

Reckitt announced an agreement to divest its essential home business to Advent International for an enterprise value of USD 4.8 billion (approximately GBP 3.6 billion), while retaining a 30% equity stake in the new entity. Shares rose 2% in early trading on July 18 following the announcement.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the remaining US-focused infant nutrition business will likely be carved out once the uncertainty around the ongoing premature infant formula litigation is resolved. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag to the company’s mid-single-digit growth ambitions.

Reckitt reported first-quarter organic sales growth of 1.1%, slightly below 1.4% company-compiled consensus. Core Reckitt portfolio performance was solid at 3.1% organic growth and full-year group guidance was maintained. Shares were trading around 5% lower at the opening of the market on April 23.

Reckitt Benckiser reported a strong 2024 adjusted operating margin improvement of 140 basis points to 24.5%, substantially ahead of company-compiled consensus of 23.3%. Adjusted EPS was up 8% year on year and 10% ahead of consensus.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the future of the remaining core infant nutrition business remains uncertain, especially given the ongoing premature infant formula litigation in North America. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag to the company’s mid-single-digit growth ambitions.

Reckitt's share price was up 10% in early trading on Nov. 1 after the company, together with Abbott, recorded a first victory in the ongoing litigation over necrotizing enterocolitis, or NEC, linked to its premature infant formula.

In its third-quarter trading update, wide-moat Reckitt reported a like-for-like net revenue decline of 0.5%, ahead of the negative 1.7% company-compiled consensus. As expected, the nutrition segment entirely drove the decline, with organic net revenue down 17.4%. Sales for the segment were affected by a supply chain disruption caused by tornado damage to an infant formula warehouse in Mount Vernon, Indiana. The impact is lower than initially expected, with management now guiding for a high-single-digit full-year net revenue decline for the segment compared with a low-double-digit decline previously. Still, the full-year outlook for the group was maintained, calling for organic sales growth of 1%-3% and adjusted operating profit growth ahead of net revenue growth. We believe this is motivated by a slightly worse-than-expected performance for the hygiene segment, which delivered like-for-like net revenue growth of 2.1%, behind the consensus of 2.7%. This represents a slowdown compared with the 4.5% organic growth reported for the first half of 2024 as the pricing contribution to net revenue growth is decelerating and volume remains soft, at 0.7% in the quarter. We don’t expect to make any material change to our forecast or our GBX 6,500 per share fair value estimate. At current levels, shares trade in 4-star territory.

As the multiple lawsuits over necrotizing enterocolitis, or NEC, related to Abbott and Reckitt Benckiser continue to wend their way through the courts, last week’s judgment against Abbott has put shares of both firms under pressure. Considering the infant-formula makers are at various stages of appeal and the nuanced scientific view, we’re leaving our fair value estimates unchanged for now. We continue to view Abbott’s narrow economic moat and Reckitt’s wide economic moat as solid, with strong intangible assets in their nutrition businesses.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the future of the remaining core infant nutrition business remains uncertain, especially given the ongoing premature infant formula litigation in North America. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag to the company’s mid-single-digit growth ambitions.

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the future of the remaining core infant nutrition business remains uncertain, especially given the ongoing premature infant fomula litigation in North America. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag to the company’s mid-single-digit growth ambitions.

Wide-moat Reckitt Benckiser reported first-quarter like-for-like revenue growth of 1.5%, significantly ahead of the 0.9% decline expected in the company-compiled consensus. The main driver of the delta was the nutrition segment for which the drop in sales was milder than previously expected, reporting a 9.9% decline compared with a 14.5% consensus decline. The segment is lapping the peak level of market share recorded in the prior year on account of the infant formula supply challenges faced by narrow-moat Abbott as well as the retail inventory buildup in the first quarter of last year. With a good start to the year, management reaffirmed the full-year 2024 outlook for 2% to 4% like-for-like sales growth, which now looks achievable given that the comparison base for the nutrition segment will get easier as the year progresses. The guidance is aligned with our forecast which sits toward the lower end of the range, and we confirm our GBX 6,700 fair value estimate. The share price was up around 5% in intraday trading given the revenue beat. Still, we think the stock remains significantly undervalued, trading at less than 14 times 2024 earnings. We believe the weakness can be primarily attributed to the uncertainty around the potential liability the group could face in the legal proceedings concerning its premature milk formula products. The share price is down almost 20% since mid-March when an Illinois jury awarded USD 60 million to a mother whose preterm baby died from necrotizing enterocolitis complications allegedly linked to the consumption of the company's Enfamil premature formula. We believe that the impact on market capitalization is likely greater than any potential settlement the company might face down the line. Still, we expect the uncertainty around this situation will remain elevated for a prolonged period as additional state cases will commence in the fall, while a judgment on the appeal for the Illinois case and other federal cases should take longer.