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Reckitt's rejuvenated bull case

With new management at the helm, the group is focusing on medium-term growth
Reckitt's rejuvenated bull case

Three years ago, Reckitt Benckiser (RB) bought baby formula company Mead Johnson (MJN) for a huge $17.9bn (£14.3bn). This should have been a pivotal moment for the household goods giant – massively strengthening its position in developing markets. But the takeover has since dampened Reckitt’s performance and put the brakes on growth. Integration has taken longer than expected and diverted management’s attention. And in China, a country particularly emphasised during the deal process, the birth rate has fallen while local competition has ramped up.

IC TIP: Buy at 6168p
Tip style
Speculative
Risk rating
Medium
Timescale
Long Term
Bull points

Anticipated turnaround under new management
Big-name brand portfolio
Diversified revenues
Rising demand for hygiene products

Bear points

Recent issues with integrating Mead Johnson business
Vulnerable to downturns in consumer spending

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