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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

JPMorgan puts Haleon on negative catalyst watch

(Sharecast News) - JPMorgan has placed consumer health company Haleon on negative catalyst watch ahead of its annual report next month, saying volume and earnings risks will weigh on the stock's rating. The bank has cut its target price for the Sensodyne, Panadol and Advil manufacturer from 295p to 290p and reiterated an 'underperform' rating.

"Having delivered strong volumes vs staples peers over the past two years, we expect top line to disappoint as the tailwinds that boosted its OTC divisions abate. Volumes should remain pressured vs sequential improvement for peers," JPMorgan said.

The bank highlighted the unravelling of Covid-led tailwinds like higher flu incidence and China's Covid wave, as well as a muted performance in the rest of the business.

JPMorgan expects 2024 like-for-like sales to grow by just 3.7%, below the company's guidance of 4-6%, and forecasts a "pedestrian margin rise" given headwinds including slowing volumes, FX movements, and dilution from the disposal of Lamisil last year.

Haleon's share price was down 1.7% at 316.1p by 1357 GMT.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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