Reckitt Benckiser Shares (RKT.L) Gain Early – Full-Year Targets On Track

Reckitt Benckiser (LON: RKT), the consumer goods giant behind Dettol and Lysol, saw its shares jump at the start of Wednesday's session after it reported its first-quarter (Q1) results.

The company reported like-for-like (LFL) net revenue growth of 1.5%, which was driven by price increases and continued strong performance in its Hygiene and Health portfolios. Despite a slight -0.5% decline in overall volume, the company expressed confidence in meeting its full-year targets, which include mid-single-digit growth for Health and Hygiene and a return to growth for Nutrition later in the year.

“We have delivered a good first quarter,” said Kris Licht, Chief Executive Officer. “Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume.”

Reckitt Benckiser shares opened up 4% higher following the report and are pushing on through early trading.

The company highlighted strong volume growth across its Hygiene power brands like Finish, Lysol, Harpic, and Vanish. The Health portfolio also experienced volume growth in Intimate Wellness, non-seasonal OTC brands, VMS, and Dettol. 

Nutrition, however, faced a decline due to the normalisation of the US market. Geographically, Reckitt Benckiser saw mid-single-digit growth in both Europe and Developing Markets. The company also boasts continued strong free cash flow generation and an accelerated share buyback program.

Looking ahead, Reckitt Benckiser maintains its LFL net revenue growth target between 2% and 4% for the full year. The company expects adjusted operating profit to grow ahead of net revenue growth, with revenue and profit growth anticipated to be stronger in the second half. 

While the overall net revenue reflects a decline due to foreign exchange headwinds, Reckitt Benckiser remains confident in its ability to deliver on its full-year targets.

On Tuesday, analysts at Jefferies upgraded Reckitt Benckiser to Hold from Underperform, raising the price target to 4,400p from 4,100p per share. In a note, Jefferies told investors that while it still sees some downside risk for the stock in the short term, at current levels, it believes the stock is contained. 

RKT shares have fallen over 23% over the last three months.