RBC Capital Markets upgraded Reckitt Benckiser on Wednesday to ‘outperform’ from ‘sector perform’ and lifted the price target to 7,000p from 5,900p.
“The re-weighting of revenue investment in favour of R&D at the expense of marketing should work well and stimulates our belief in Reckitt’s revenue growth potential,” RBC said.
“We have long believed that Reckitt over-innovates, rolling out and charging more for ‘new’ products that offered little incremental benefit. We welcome the increased emphasis on what we trust is substantive innovation, and expect it to have favourable implications for sales growth.”
The bank added that the disposal of the remaining infant nutrition business would reinforce its belief further.
At 1125 BST, the shares were up 1.7% at 6,396p.
