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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
- Reckitt Benckiser (A3/A-) reported disappointing Q4 earnings on 28 Feb leading to a sharp equity sell-off (-11% since reporting) and revised estimates (FY24 EBITDA consensus -3.5% since reporting).
- Despite an FY24 outlook that was broadly in line with consensus, fundamental weakness in their Nutrition segment and competitiveness in the Hygiene segment have led to a degree of scepticism around the outlook.
- We also flagged last week that Reckitt-owned Clearasil is one of the names cited in a study that indicated the presence of unsafe levels of cancer-causing chemical benzene, leading to a further 5-6bps of widening on the announcement.
- Despite strong credit metrics (leverage -0.2x from FY22 and FY FCF +11%), underperformance against close peers has been evident; Reckitt’s EUR 30s are plotted on the below time-series against peers L’Oreal, Unilever, P&G and Colgate (all higher rated) with spreads all at/through recent wides.
- Though Reckitt’s ratings have been steady for years and Moody’s adopted a Positive outlook last April, we also note that Reckitt’s curve now trades wide of many A-/BBB+ Consumer curves.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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