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Goldman Sachs cuts Reckitt to 'neutral' on share price outperformance

Michele Maatouk

LONDON (ShareCast) - (ShareCast News) - Goldman Sachs (NYSE: GS-PB - news) has downgraded Reckitt Benckiser (Xetra: A0M1W6 - news) to 'neutral' from 'buy' and cut its price target to 6070p from 6390p, noting the 11% share price outperformance versus the consumer staples sector year-to-date. It said that since being added to the 'buy' list on 12 February 2014, the stock is up 31.8% versus the FTSE World Europe up 3.1%.

Goldman said it sees Reckitt as well positioned to take share in the over-the-counter market, both through bolt on M&A and share gains.

"We believe management can deliver the targeted cost savings through 'Project Supercharge' in full-year 2015 and beyond. However we believe this is reflected in the valuation and that the stock is now fairly valued." The bank downgraded its estimates by 6% for full-year 2015 and 7% for 2016 as it pushes out its M&A estimates following the lack of acquisitions this year to date.

At 1125 BST, Reckitt shares were down 3.2% at 5,928p.