LONDON (SHARECAST) - Consumer products giant Reckitt Benckiser is due to report its third-quarter results on Wednesday.
The company, whose 'powerbrands' include Vanish, Harpic, Cillit Bang and Finish, is expected to report a 3.8% organic sales growth rate on the guided metric (excluding RB Pharmaceuticals and including Foods), according to consensus estimates.
Investec, however, predicts a 3.1% increase - "a low-end view", it admits. "We note the one percentage point tougher comp than Q2, continuing challenges in Southern Europe and hints of a slowdown in Asia," said analyst Martin Deboo in a research report on Monday.
"We continue to see the impending change of CFO as a positive catalyst and are warming to the Reckitt story. But there are some difficult H2 waters to navigate," Deboo said.
Meanwhile, cigarette giant British American Tobacco is also on the schedule for a third-quarter update on Wednesday, in which it is expected to reported a 5% increase in organic revenues (constant currency basis) for the nine months to September 30th, according to Panmure Gordon last week.
This will be an acceleration from the 4% growth reported in the first half, driven by improved pricing, the broker said.
Group volumes are forecast to fall by one billion sticks, or 0.1%, to 522bn over the nine-month period.
Panmure said: "Tobacco stocks have been weak recently, impacted by negative regulatory news flow and a more general switch out of defensive names. Year to date BATS’ shares have underperformed the FTSE All Share by 1.3%, recording an absolute gain of 5.9%."
The broker said that the valuation - shares were trading last week at 14.3 times earnings - is undemanding "given the strength of the underlying cash flows".
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