Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) latest results have drawn a warm response from the City, with both UBS and Barclays highlighting strong momentum in the company’s core business and a promising upgrade to full-year guidance.
While overall like-for-like sales growth of 1.9% in the second quarter was only a touch ahead of expectations, the standout performance came from Core Reckitt, which delivered 5.3% organic growth, well ahead of what analysts had pencilled in.
Emerging markets were the star, accelerating to nearly 15% growth in the quarter, while the self-care division also posted strong numbers.
Margins came in higher than expected, thanks to cost-saving efforts and a focus on operational efficiency, even as Reckitt continued to increase its marketing spend.
Barclays points out that market share gains are broadening, with almost 60% of the core portfolio either holding or growing share.
Weakness at Mead Johnson and Essential Home weighed on headline growth, but the core business is where most analysts and investors are now focused.
Management has responded to the first-half beat by lifting its full-year sales guidance, with brokers nudging up their earnings forecasts as well.
Both banks see the valuation as attractive, with Reckitt still trading at a discount to major European peers despite this improving outlook.
The shares rose 11% to 5,576p.