Reckitt Benckiser Group PLC's (LSE:RKT, ETR:3RB) turnaround may finally be gaining traction.
RBC Capital Markets has raised its price target from £60 to £64 and reiterated an outperform rating, arguing that the consumer goods group is building a record of reliable mid-single-digit growth and improved execution under its “Fuel for Growth” plan.
The broker has nudged up its revenue forecasts, now expecting like-for-like sales growth of 3.2% this year, 4.2% next, and 3.9% in 2027, putting “core Reckitt” near the middle of management’s guided 4-6% range.
The standout has been emerging markets, where organic growth is set to reach double digits in 2025.
RBC reckons Reckitt trades at a discount to peers even after a 17% share price gain this year.
On 2026 estimates, the shares change hands at about 18 times earnings, versus around 20 times for the broader European consumer sector.
The divestments of its Essential Home and Mead Johnson Nutrition units should sharpen management focus, though cost duplication will need offsetting savings.
With a 3.4% yield and a forecast rise in operating margins, RBC thinks the shares are undervalued, even after allowing for the lingering risk from US product litigation.