Reckitt Benckiser Group PLC (LSE:RKT, FRA:3RB, XETRA:3RB)<\/a>, the consumer goods company behind brands including Dettol, Nurofen and Durex, on Friday but cut its price target by 5% to \u00a374, arguing the market has yet to reward the group for an improved long-term earnings growth model.<\/p>\nThe note followed Thursday’s results, in which Reckitt reported like-for-like (LFL) sales growth of 5.2% in the fourth quarter of 2025, a metric that strips out currency and portfolio changes, which UBS described as best in class among European peers.<\/p>\n
UBS identified three factors weighing on investor sentiment.<\/p>\n
The first was heavy reliance on emerging markets, which grew at 17% LFL in the quarter and accounted for more than 100% of group growth, raising questions about sustainability against a high base of comparison in 2026.<\/p>\n
The second was a weak performance in Europe, where the company cited subdued demand and elevated promotional activity.<\/p>\n
The third was the added forecasting complexity arising from the planned deconsolidation of the Essential Home (EH) division, which makes products including Air Wick and Finish.<\/p>\n
The broker estimates Reckitt will deliver adjusted earnings per share of 345p in 2026, down around 2% year on year, as profit growth in the retained Core Reckitt and Mead Johnson Nutrition infant formula businesses fails to compensate for the loss of Essential Home earnings and a higher tax rate.<\/p>\n
UBS forecasts Core Reckitt LFL growth of 4.6% for full-year 2026, with improvement expected from the second quarter as the seasonal over-the-counter medicines portfolio, which includes Mucinex, Strepsils and Lemsip, laps an unusually weak prior-year period.<\/p>\n
Despite the near-term earnings pressure, UBS argued that 2026 should mark a turning point in how investors perceive Reckitt, pointing to increased brand investment, higher capital expenditure and a new organisational structure as evidence that recent progress is sustainable.<\/p>\n
The stock trades at around a 20% discount to the average valuation of European food and household products peers, despite what UBS characterises as top-quartile organic sales growth prospects.<\/p>\n
In early afternoon trading, the stock was 2.4% at\u00a05,562p.<\/p>\n","protected":false},"excerpt":{"rendered":"Reckitt not yet rewarded for improved earnings model, says UBS after strong quarter Proactive uses images sourced from…\n","protected":false},"author":2,"featured_media":43680,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21355],"tags":[21534,273,7920,21399,21376],"class_list":["post-43679","post","type-post","status-publish","format-standard","has-post-thumbnail","category-reckitt-benckiser","tag-core-reckitt","tag-earnings-growth","tag-earnings-per-share","tag-reckitt","tag-reckitt-benckiser"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116611700820010972","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/43679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=43679"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/43679\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/43680"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=43679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=43679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=43679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Reckitt](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/05\/7316fd9512195327005f082e39bb6cfd.jpeg\")
Reckitt not yet rewarded for improved earnings model, says UBS after strong quarter Proactive uses images sourced from Shutterstock <\/p>\n