Goldman Sachs cuts Reckitt to 'neutral' on share price outperformance

Goldman Sachs has downgraded Reckitt Benckiser to ‘neutral’ from ‘buy’ and cut its price target to 6070p from 6390p, noting the 11% share price outperformance versus the consumer staples sector year-to-date.

It said that since being added to the ‘buy’ list on 12 February 2014, the stock is up 31.8% versus the FTSE World Europe up 3.1%.

Goldman said it sees Reckitt as well positioned to take share in the over-the-counter market, both through bolt on M&A and share gains.

“We believe management can deliver the targeted cost savings through ‘Project Supercharge’ in full-year 2015 and beyond. However we believe this is reflected in the valuation and that the stock is now fairly valued.”

The bank downgraded its estimates by 6% for full-year 2015 and 7% for 2016 as it pushes out its M&A estimates following the lack of acquisitions this year to date.

At 1125 BST, Reckitt shares were down 3.2% at 5,928p.