Reckitt Benckiser Group plc (LON:RKT) Just Released Its Interim Earnings: Here's What Analysts Think

Investors in Reckitt Benckiser Group plc (LON:RKT) had a good week, as its shares rose 2.5% to close at UK£44.93 following the release of its half-yearly results. Results were roughly in line with estimates, with revenues of UK£7.2b and statutory earnings per share of UK£2.29. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Reckitt Benckiser Group

Taking into account the latest results, Reckitt Benckiser Group's 15 analysts currently expect revenues in 2024 to be UK£14.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 40% to UK£3.10. Before this earnings report, the analysts had been forecasting revenues of UK£14.5b and earnings per share (EPS) of UK£3.21 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£55.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Reckitt Benckiser Group at UK£71.70 per share, while the most bearish prices it at UK£44.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 0.3% annualised decline to the end of 2024. That is a notable change from historical growth of 2.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Reckitt Benckiser Group is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Reckitt Benckiser Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Reckitt Benckiser Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£55.67, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Reckitt Benckiser Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Reckitt Benckiser Group going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Reckitt Benckiser Group .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com