Reckitt Benckiser share price: Analysts weigh in on CEO departure

on Jan 18, 2019
Updated: Mar 11, 2020

AJ Bell argues that news that Reckitt Benckiser’s (LON:RB) chief executive will step down is not a surprise considering the consumer giant’s poor performance, Citywire reports. The comments come after the company announced earlier this week that Rakesh Kapoor had decided to retire by the end of the year after more than eight years as CEO and more than three decades at the company.

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Reckitt Benckiser’s share price came under pressure following the news, making the consumer giant one of the most notable FTSE 100 fallers on Wednesday. The group’s shares have given up more than 11 percent of their value over the past year.

AJ Bell weighs in on CEO news

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Citywire quoted AJ Bell analyst Russ Mould as commenting this week that if Reckitt’s CEO was leaving of his own accord “then he’s not exactly departing when everything is going well”. The analyst elaborated that the £12.9-billion acquisition “of baby milk manufacturer Mead Johnson in June 2017 was considered by many investors to have been a bad deal with Reckitt paying too much and buying a company not in as good condition as first thought”.

“Growth has been slowing on a group basis, with Reckitt battling various issues ranging from cyber-attacks to factory problems,” Mould continued, adding that the new chief executive would need “focused and highly skilled as Reckitt will not be an easy company to run”.

Analyst ratings update

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Liberum Capital reaffirmed the company as a ‘buy’ following Wednesday’s news, without specifying a price target on the shares, while Royal Bank of Scotland, which rates the Durex maker as a ‘sell,’ set a valuation on the stock of 5,100p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 7,065.26p.

As of 15:18 GMT, Thursday, 17 January, Reckitt Benckiser Group Plc share price is 5,857.00p.

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