Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) got the 'best-case scenario' result in the Whitfield trial in Missouri, say analysts at Barclays, as all the infant formula NEC liability claims were dismissed.
Plaintiffs were seeking $6 billion of damages, with Barclays stating that ahead of the verdict investors were building in a substantial damages award against the company and its subsidiary AMV.
The bank noted that this is the first legal victory for the defendants, having previously lost the Watson and Gill trials and strengthened their position in any settlement negotiation.
Barclays said its base case remains that Reckitt settles its share of NEC liability for around US$1 billion in late 2025 or early 2026.
“However, its ability to successfully negotiate a settlement on favourable terms is likely strengthened by a legal victory,” said the bank.
A date has yet to be set for the federal MDL bellwether trials start but more state cases might be scheduled at short notice.
Barclays added it continues to like Reckitt but there is plenty of risk and potential reward.
In trading terms, Reckitt guided for a "big" and "strong" fourth quarter while the sale of Essential Home might be announced as early as the first quarter of 2025.
Shares rose 8% today to 5,072p against Barclays' target of 5,780p.