Haleon PLC (LSE:HLN, NYSE:HLN) was a top FTSE 100 riser on Tuesday after a bullish write-up by analysts at Barclays following a three-day road trip with management of the consumer goods and healthcare giant.
'Equal weight' is the investment view but the price target is 347p or 24% higher than today’s 276.4p, up 2% on the day.
In particular, the Barclays analysts said they were impressed by Haleon's organic sales growth target of 4-6%, which is comfortably ahead of the sector overall, and the fact that it is gaining share in all key markets bar Germany.
Cold and flu outbreaks have an impact on sales growth, with a sizeable tailwind in the comparable year, but Haleon believes its brands are reasonably resilient to the economic backdrop given their therapeutic nature.
Growth opportunities are seen in oral care - Paradontax, for bleeding gums, Sensodyne, for sensitive teeth - and for Centrum in vitamins, minerals and supplements (VMS), where a shift online is underway.
Elsewhere, the Barclays analysts noted that Haleon generates plenty of cash and that reducing its debts is a priority for management.
They said: “On our forecasts, Haleon will finish 2024e on 2.1x net debt / EBITDA although this assumes no further M&A.”
Finally, on Zantac and its legal issues, Haleon believes it is outside of the liabilities in question, but the Barclays analysts noted that the trials are likely to start Easter next year with expert witness proceedings already underway.