Barclays has issued a research note forecasting slower growth for Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) due to continued destocking of cold and flu products and a sluggish recovery in infant formula.
The investment banking arm of the high street lender now expects organic sales growth of 0.4% for the second quarter, down from the previous estimate of 1.6%.
For the third quarter, it predicts a growth of 3.2%, slightly lower than the earlier forecast of 3.6%. Growth for the fourth quarter remains at 5.3%. Short-term operational visibility is limited, according to Barclays.
In the Health segment, Barclays anticipates 2% growth in the second quarter, revised down from 4%.
This is still an improvement from the 1% growth seen in the first quarter. The Hygiene segment's growth forecast remains unchanged at 3%, consistent with the 7% growth in the first quarter after accounting for inventory adjustments.
In the Nutrition segment, Barclays expects a 9% decline in the second quarter, a slight improvement from the 9.9% decline in the first quarter, but it cautions that the outcome could vary widely.
Barclays' revised numbers align with Reckitt's management commentary during the first-quarter results, where the company indicated they did not expect significant changes to the full-year consensus.
The bank maintains an 'overweight' rating on Reckitt Benckiser stock, with a price target of 6,100 pence, compared to the current price of 4,439 pence (down 1.5% on the day).