Analysts at Liberum believe that Reckitt Benckiser (LON:RB) could outbid GlaxoSmithKline (LON:GSK) for Pfizer’s consumer health division whose acquisition could shake up the consumer giant’s business, Citywire has reported. The news comes after it emerged earlier this year that the two FTSE 100 companies were the only firms to have submitted non-binding bids for the business which comprises a string of over-the-counter treatments, including painkiller Advil.
Reckitt Benckiser’s share price has been subdued in London in today’s session, having given up 0.66 percent to 5,714.00p as of 09:41 GMT, underperforming the blue-chip FTSE 100 index which currently stands 0.02 percent lower at 7,201.93 points. The group’s shares have lost some 21 percent of their value over the past year, as compared with a 1.5-percent dip in the Footsie.
Liberum comments on Pfizer business bid
Liberum reaffirmed its ‘buy’ rating on Reckitt Benckiser yesterday, while trimming its price target on the shares from 8,000p to 7,400p, reflecting the broker’s “lowered earnings per share estimates and recent sector de-rating”.
“Reckitt Benckiser’s new structure may be a prelude to a split or sale of hygiene home if the group secures Pfizer’s consumer health unit,” Liberum’s analyst Robert Waldschmidt commented, as quoted by Citywire, adding that the broker estimated that the consumer goods group could pay more than GSK for the business and “still deliver meaningful earnings per share accretion”.
Other analysts on Reckitt Benckiser
The 22 analysts offering 12-month price targets for Reckitt Benckiser for the Financial Times have a median target of 7,110.00p on the shares, with a high estimate of 8,800.00p and a low estimate of 5,000.00p. As of March 3, the consensus forecast amongst 24 polled investment analysts covering the consumer goods group has it that the company will outperform the market.