Reckitt Benckiser boosted to 'buy' from 'hold' at Jefferies

9th Mar 2015 13:14

UK consumer staple stock Reckitt Benckiser has had its rating promoted to 'buy' from 'hold' at Jefferies on Monday.The investment bank noted that Reckitt's finished strongly in 2014 and the guidance for 2015 is confident. "With plenty of margin tailwinds in FY15, consensus seems curiously muted. We are more bullish, and move to an-ahead-of-consensus view," said Jefferies.It added that while the stock trading on 25 times forward earnings is not 'cheap', it's still a company worth investing. "Growth and cash generation are premier league and, critically, there is the reassurance factor of a management team, working for shareholders, driven by apparently restless ambition," said Jefferies.It added that full year 2015 guidance is looking for similar levels of growth than 2014 and moderate to strong margin expansion. "We upgrade FY15 EPS (forecast) by 4% and EBIT (forecast) by 6%. (Our) FY15 EPS of 242p is around 1% ahead of post-event consensus and FY16 of 263p is around 3% ahead," added Jefferies.As a result, Jefferies boosts the target price on the stock to 6750p from 4800p.