Reckitt Benckiser (RBGLY, Financial) is exploring additional strategies to facilitate the sale of its Essential Home division, which includes well-known brands like Air Wick and Cillit Bang. This decision comes after initial offers did not meet the company's expectations, according to individuals familiar with the situation. Despite this, Reckitt remains committed to offloading the business. Discussions with private equity firm Advent are ongoing, suggesting that a transaction is still on the table. To address differences in valuation perceptions, Reckitt is considering retaining a portion of the business or structuring the sale in an alternative manner.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Reckitt Benckiser Group PLC (RBGLY, Financial) is $15.27 with a high estimate of $15.30 and a low estimate of $15.24. The average target implies an upside of 11.70% from the current price of $13.67. More detailed estimate data can be found on the Reckitt Benckiser Group PLC (RBGLY) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Reckitt Benckiser Group PLC's (RBGLY, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Reckitt Benckiser Group PLC (RBGLY, Financial) in one year is $16.36, suggesting a upside of 19.68% from the current price of $13.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Reckitt Benckiser Group PLC (RBGLY) Summary page.
RBGLY Key Business Developments
Release Date: March 06, 2025
- Group Net Revenue Growth: 1.4% in 2024, in line with guidance of 1% to 3% growth.
- Health and Hygiene Like-for-Like Net Revenue Growth: 4.6% with volume growth of 2.1%.
- Adjusted Operating Profit Increase: 8.6% driven by the fuel for growth program.
- EPS Growth: 7.9% supported by share buyback and lower tax rate.
- Cash Returns to Shareholders: GBP2.7 billion, up 75% year-on-year.
- Free Cash Flow: GBP2.2 billion with a 91% conversion rate.
- Gross Margin: Expanded by 70 basis points, remaining above 60%.
- Adjusted Operating Margin: Expanded by 140 basis points to 24.5%.
- CapEx Investment: GBP500 million reflecting multi-year investments in R&D and supply chain.
- Nutrition Like-for-Like Net Revenue Decline: 7.3% due to supply disruption.
- Hygiene Like-for-Like Growth: 4.2% with balanced volume and price mix growth.
- Health Like-for-Like Growth: 2.1% with strong performance in non-seasonal power brands.
- Net Debt to EBITDA: 2 times, maintaining a strong balance sheet.
- Dividend Increase: 5% for the full year.
- Market Share Gains: 55% of top CMUs held or gained market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Reckitt Benckiser Group PLC (RBGLY, Financial) reported a solid financial performance for 2024, with group net revenue growing by 1.4% in line with guidance.
- The company achieved a 4.6% like-for-like net revenue growth in health and hygiene, excluding seasonal OTC impacts.
- Reckitt Benckiser Group PLC (RBGLY) increased its adjusted operating profit by 8.6%, supported by the fuel for growth program.
- The company returned GBP2.7 billion to shareholders through dividends and share buybacks, marking a 75% increase from the previous year.
- Reckitt Benckiser Group PLC (RBGLY) has made significant progress in organizational simplification, reducing management layers from five to three to enhance decision-making and accountability.
Negative Points
- The company's North American performance was negatively impacted by a weak cold and flu season, affecting seasonal OTC sales.
- Reckitt Benckiser Group PLC (RBGLY) reported a 7.3% decline in like-for-like net revenue for its nutrition segment, primarily due to supply disruptions from a tornado.
- The company faces ongoing litigation challenges related to Mead Johnson Nutrition, which could impact future performance.
- Reckitt Benckiser Group PLC (RBGLY) has set a cautious growth guidance for 2025, reflecting uncertainties in the macroeconomic environment.
- The company acknowledged challenges in the competitive air care market in the US, which could affect Essential Home's performance in the first half of 2025.
