Citi has reiterated its 'sell' rating on Haleon PLC (LSE:HLN, NYSE:HLN) and trimmed its price target from 340p to 335p, warning that the consumer health group’s valuation fails to reflect mounting pressures from US retail shifts and slowing brand momentum.
The move comes despite a recent rally in the shares, which closed on Wednesday at 377.20p. Citi attributed the gains to a positive reaction to foreign exchange tailwinds, particularly in emerging markets.
“Haleon shares have reacted positively to better than expected FX for consensus,” analyst Tom Sykes wrote in a note on Thursday. “This appears to have been driven by emerging markets and we note the significant rally in currencies such as the Ruble and Rand.”
Citi estimates that Russia accounts for around 3–4% of Haleon’s group earnings before interest and tax, and around double that proportion of its EMEA Latin America division. A 20% appreciation in the rouble would be worth roughly 10 basis points to group margins.
But the bank warned that the FX boost masks more persistent structural challenges. “We remain concerned that channel shift which is most significant in the US but will come to all categories in all geographies is a negative for Haleon, which is not reflected in the current price,” Sykes said.
Citi also pointed to a continued slowdown in online search data for Haleon’s powerbrands, and noted that cold and flu trends were “weakening quickly”.
The bank reduced its earnings per share forecast for 2025 by 0.7% and by 1.8% for 2026, leaving it 3.9% below consensus for that year.