Broker snap: Credit Suisse keeps outperform rating on Reckitt

10th Jan 2012 10:46

Household products group Reckitt Benckiser was given a boost on Tuesday morning by Credit Suisse, which reiterated its outperform rating on the stock."We believe that Reckitt's business model is still healthy and concerns over the sustainability of margins are overdone."While Credit Suisse did admit that Laundry is Reckitt's "main growth drag", it did highlight that the group's core volume growth is still 2.5%, in line with peers. The Cillit Bang, Durex and Strepsil maker is "attractively priced", according to the broker, which said that the stock is trading at 13.5 times 2012 earnings compared with the sector (US/European Food/Health and Personal Care) average of 16.5.However, as a result of a recent earnings per share downgrade - due to currency movements - the target price falls from 4,000p to 3,800p.By 10:57, shares were up 2.09% at 3,376p.BC