Reckitt Benckiser’s first-quarter sales are expected to be ahead of Jefferies’ previous consensus, with the broker remaining hold on the consumer goods group with a target price of 5,870p.
The US bank said that sales, despite its general scepticism, “reflect improving sell-out trends towards the end of the quarter.”
First quarter like-for-like sales to 26 April are expected 4.3% ahead of the same period last year, compared to “relative consensus” of 2.7%.
Specifically, the broker expects a 6.7% increase in sales of health products like-for-like compared to the consensus of 5.4%, while hygiene sales are expected to be 1.6% higher compared to the previous consensus of 0.4% lower.
For nutrition, sales are expected to be 5% ahead like-for-like, relative to a consensus of 1.4%
If first-quarter sales do beat consensus, the broker believes that what will matter next is how well the producer of health, hygiene and nutrition products jumps the hurdles of a tougher second and third quarter.
Additionally, Reckitt needs to confirm who the next CEO will be, with “continuing uncertainty a disincentive to invest for many.”