Reckitt Benckiser share price rises as JPMorgan turns bullish on company

Analysts point to potential upside in earnings per share

Reckitt Benckiser share price rises as JPMorgan turns bullish on company

Shares in Reckitt Benckiser (LON:RB) closed higher in London yesterday, as analysts at JPMorgan turned bullish on the company, pointing to potential upside in the group’s earnings per share. The comments are a boost for the consumer goods giant which recently posted a drop in third-quarter revenue after a cyber-attack disrupted its operations earlier this year.

Reckitt Benckiser’s share price added 1.42 percent to end the previous session at 6,492.00p, outperforming the broader UK market, with the benchmark FTSE 100 index closing 0.23 percent higher at 7,533.40 points. The group’s shares have lost more than six percent of their value over the past year, and are down by some five percent in the year-to-date.

JPMorgan turns bullish on Reckitt

JPMorgan lifted its rating on Reckitt Benckiser to ‘overweight’ yesterday, hiking its price target on the shares from 6,900p to 7,500p, pointing to potential upside in the firm’s earnings per share in fiscal year 2020 and the potential for shifts in the company’s portfolio of assets to unlock value.

WebFG News reports that after running various scenario analyses, the broker concluded that the shares’ valuation could range between 6,400p and 9,000p. In any case, however, the six-percent reduction in the analyst consensus for the group’s EPS in 2018 over the past six months meant there was now scope for ‘short-term relief’ to 7,500p.

Regarding the outlook for earnings, JP Morgan believes the FTSE 100 group could return to like-for-like growth of roughly three percent – in line with peers – from the fourth quarter of 2017.

Other analysts on company

The 21 analysts offering 12-month price targets for Reckitt Benckiser for the Financial Times have a median target of 8,000.00p on the shares, with a high estimate of 10,000.00p and a low estimate of 5,600.00p. As of November 22, the consensus forecast amongst 25 polled investment analysts covering the consumer goods giant has it that the company will outperform the market.  

As of 08:05 GMT, Thursday, 23 November, Reckitt Benckiser Group Plc share price is 6,491.00p.

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