Reckitt Benckiser shares boosted by UBS rating upgrade to 'buy'

Shares in Reckitt Benckiser rose 1% to 6053p on Friday after receiving a boost by analysts at UBS who upgraded their rating on the stock to ‘buy’ from ‘hold’.

UBS analysts said that in a sector they have turned increasingly more cautious on, Reckitt Benckiser is the favourite pick, raising their target price on the stock to 6505p from 5500p.

“From a long-term point of view, we have always seen it as one of the two core holdings in the European household and personal care space,” they said.

The analysts said that’s because of the experience of the management team under chief executive Rakesh Kapoor, the quality of the brand portfolio, the sustainability of the organic top-line growth and the relentless focus on operating cost control.

Furthermore, the analysts opined that from a shorter term perspective, Reckitt Benckiser is likely to see a less challenging first quarter than most, reflecting the benefit of the strong cold and flu season in Europe and North America.

Additionally, “Reckitt Benckiser is appealing on the merger and acquisition front as both, a potential buyer (notably in the areas of Health and Hygiene) and as a potential strategic asset (given the attractiveness of it’s over the counter business),” they added.