RBGLY changes
Pick any two versions below to diff them.
- Price
- $13.30 → $13.71(+3.1%)
- About
- Reckitt Benckiser is a UK-based consumer health and hygiene company. It calls its core business "Core Reckitt," built around 11 "Powerbrands" that make up removed: about added: more than 80% of added: Core Reckitt net revenue: Dettol and Lysol in disinfectant cleaning, Finish and Vanish in dishwashing and stain removal, Harpic in toilet cleaning, Nurofen, Mucinex, Gaviscon, and Strepsils in over-the-counter health, and Durex and Veet in intimate wellness. Separately, it owns Mead Johnson Nutrition, maker of the Enfamil infant formula brand, which it bought added: in 2017 for removed: close to $18 added: $16.6 billion in removed: 2017 added: equity, or about $17.9 billion with debt. In July 2024, Reckitt said that Mead Johnson is not a core business and removed: has been trying to sell since 2024. added: that it will consider all options for it. In December 2025, Reckitt completed the sale of its Essential Home business, including Air Wick and Calgon, to private equity firm Advent International for added: up to $4.8 billion, added: including up to about $1.3 billion of later payments, keeping a 30% stake in the buyer's holding vehicle. Emerging markets are now Reckitt's main growth engine, while Europe and North America grow more slowly or shrink. Reckitt's ordinary shares trade on the London Stock Exchange; five RBGLY ADRs represent one ordinary share.
- Thesis
- Reckitt Benckiser trades at a discount because investors worry about two issues. removed: First, added: The first issue is Mead removed: Johnson: added: Johnson. In July 2024, Reckitt removed: has tried for two years to sell its added: said that the infant-formula removed: unit. added: unit is not core, but it has not announced a sale. Lawsuits over necrotizing enterocolitis (NEC), a serious bowel disease in premature removed: babies linked to Enfamil formula, keep complicating added: babies, make a removed: sale. Second, the Essential Home divestment made adjusted added: sale more difficult. The second issue is lower reported earnings. Adjusted earnings per share removed: fall sharply added: fell 9.7% in H1 removed: 2026, simply added: 2026 because the profit removed: that business used to contribute added: of Essential Home, which Reckitt sold, is gone. removed: Core Reckitt's like-for-like growth means sales growth after removing the effect of currency swings and business changes. For the removed: discount added: gap to close, removed: that added: Core Reckitt like-for-like growth removed: needs to keep accelerating past added: must stay at or above the 4.2% removed: pace it reached in added: of Q2 removed: 2026. That would match added: 2026, in line with the removed: 4%-5% full-year added: 4% to 5% guidance removed: management has held. added: for 2026. Like-for-like growth removes the effect of currency and of businesses bought or sold. A sale of Mead Johnson, even at a removed: price much lower added: price than removed: what Reckitt paid in 2017, would remove a removed: major distraction. It would added: large distraction and let the market value the simpler removed: remaining business removed: on its own. added: alone. Mead Johnson removed: also added: has no adverse NEC jury verdict outstanding. It won removed: its added: the first federal bellwether removed: NEC trial in August 2026, removed: which removed one source added: and an appeals court reversed a $60 million verdict in June 2026. But hundreds of removed: legal uncertainty. Hundreds of NEC lawsuits are still pending, removed: though, and removed: an earlier $60 million verdict was sent back for retrial rather than dismissed. added: the reversed case can go to a new trial. The next removed: scheduled test is added: tests are the Q3 trading update on October 27, removed: 2026. It should give a fresh read on Core Reckitt growth. On November 19, 2026, Reckitt holds added: 2026 and an investor event removed: about its added: on North America removed: business. Further news on removed: the added: November 19, 2026. News on Mead Johnson removed: sale could arrive added: can come at any removed: point, given how long that process has already run. added: time. If growth removed: keeps compounding added: holds and Mead Johnson is removed: fully sold, the removed: discount could added: gap can close within removed: the next added: about a year. The main risk is removed: that a large removed: adverse NEC removed: verdict, added: verdict or removed: a stalled sale process, could added: settlement, or no sale, which would keep removed: tying up capital and management attention removed: well beyond added: tied up after 2026.
- Risks
- Mead Johnson still faces hundreds of pending necrotizing enterocolitis (NEC) lawsuits over Enfamil in US federal and state courts. Reckitt won the first federal bellwether trial in August 2026, but an earlier $60 million verdict against it was only reversed on appeal and sent back for retrial, not dismissed. added: No date is set for the next trial against Mead Johnson. In August 2026, Abbott agreed to pay about $670 million to settle about 2,000 NEC claims, which gives a reference for a possible Mead Johnson settlement. A large adverse verdict removed: could still happen and added: or settlement would also make Mead Johnson harder to sell. Reckitt removed: has been trying to sell added: said in July 2024 that Mead Johnson Nutrition removed: since 2024 and reportedly wants around $7 billion, added: is not core, but it has announced no sale. A sale would probably be at a removed: steep markdown from added: price far below the removed: nearly $18 added: $16.6 billion removed: it paid in 2017. Talks with Danone were only exploratory as added: equity price of added: 2017. The last reported possible buyer was Danone, in April removed: 2026. added: 2026, and no talks were confirmed. A stalled or failed sale process would keep tying up capital and management attention. Adjusted earnings per share fell 9.7% in H1 2026 because Essential Home's profit contribution is gone. Further portfolio simplification, including a Mead Johnson sale, would likely cause a similar near-term earnings drag even if it is good for the business long term. Europe, one of Reckitt's larger markets, keeps shrinking: like-for-like revenue there fell 4.2% in Q1 2026 and removed: was still negative added: 3.0% in removed: H1. added: H1 2026. Growth guidance depends on emerging markets and North America offsetting continued European weakness. Reckitt reports in British pounds while RBGLY trades in US dollars. Swings in the pound-dollar exchange rate can move the ADR's returns up or down independent of how the underlying business performs. RBGLY is a US over-the-counter ADR, not a NYSE or Nasdaq listing. It likely trades with less liquidity and wider bid-ask spreads than Reckitt's London-listed ordinary shares. Private-label and store-brand products compete with Reckitt's household cleaning and OTC health brands, especially among price-sensitive shoppers, which can pressure volumes and limit pricing power in some categories.
- Balance sheet
- added: Cash: £874M Debt: £10.2B Net debt: £9.4B EBITDA, last 12 months: £3.7B Net debt / EBITDA: 2.5× (medium) Undrawn credit line: £3.9B Debt due within 12 months: £2.7B Ratings: Moody's A3 (stable outlook), S&P A- (stable outlook) Reckitt removed: funds itself with added: borrows centrally through unsecured bonds, commercial paper and bank removed: lines that it issues centrally. added: lines. It removed: keeps added: aims to keep the debt level of an A-rated removed: company on purpose. At June 30, 2026, total borrowings were £10.2 billion and net debt was £9.4 billion. added: company. Debt includes £296 million of leases. Net debt removed: was 2.5 times 12-month adjusted EBITDA of £3.74 billion, up added: rose from added: £6.6 billion, or 1.6 times added: adjusted EBITDA, at December 31, 2025. The removed: reason is that Reckitt paid added: causes are a £1.6 billion special dividend from the Essential Home removed: sale added: sale, paid on February 20, 2026, and removed: bought back £599 million of removed: shares. Near-term debt is higher than usual. added: share buybacks in H1 2026. A $2.5 billion bond removed: became due added: in June 2027 is now in the debt due within one year. removed: The company added: At June 30, 2026, Reckitt also removed: issued added: had £723 million of commercial paper and removed: drew £600 million added: drawn on a added: committed bank facility. removed: But £3.9 billion of its £4.5 billion committed facilities added: Free cash flow in H1 2026 was removed: still undrawn. Moody's rates Reckitt A3 and S&P rates it A-, both stable. added: £419 million, 32.7% less than in H1 2025. Equity was removed: only £5.7 billion, against £15.9 billion of goodwill and intangible assets. removed: This comes added: Equity is low mainly because of a negative merger reserve of £14.2 billion from removed: past write-downs added: the 1999 merger of removed: Mead Johnson added: Reckitt & Colman and added: Benckiser, and because of large cash returns. Reckitt holds no provision for the NEC removed: lawsuits, because after the trial wins it does not consider added: lawsuits. It says that a removed: payout probable. Management expects leverage to start to fall through 2027, so new cash returns depend on free cash flow. The proceeds added: cost is not probable and cannot be reliably estimated, but can be significant. A sale of removed: a Mead Johnson removed: sale would be added: is the fastest way to removed: cut added: reduce debt. As of Jun 30, 2026.
- Recent events
- Sep 16, 2026: Reckitt announced up to $600 million of multi-year investment in its US operations, including a new science and innovation campus in New Jersey and an expanded OTC manufacturing facility in North Carolina opening in H1 2027. Sep 1, 2026: J.P. Morgan upgraded Reckitt to overweight from removed: neutral, coinciding with added: neutral after the Mead Johnson trial removed: win. added: win and raised its price target to 6,500p from 5,800p. Reckitt shares rose removed: 4.3% added: about 4% that day. Aug 31, 2026: A federal jury in Chicago returned a unanimous defense verdict for Mead Johnson in Inman v. Mead Johnson, the first bellwether trial removed: to reach a verdict in the removed: multidistrict added: federal NEC baby-formula removed: litigation. added: litigation (MDL 3026) to reach a jury verdict. The London market was closed that day, and Reckitt shares rose on added: September 1. Aug 20, 2026: Abbott, the removed: news. added: other defendant in the NEC lawsuits, agreed to pay about $670 million to settle the $495 million Gill verdict and about 2,000 other NEC claims, with no admission of liability. Mead Johnson was not part of this settlement. Jul 29, 2026: Reckitt reported H1 2026 results. Core Reckitt like-for-like net revenue grew 2.7% in H1, accelerating to 4.2% in Q2. Adjusted diluted EPS fell 9.7% to 152.1p, mainly due to the Essential Home divestment. The board raised the interim dividend 5% to 88.6p and announced a new buyback of up to £500 million over the next 12 months. Full-year guidance was maintained. Jun 12, 2026: The Illinois Fifth District Appellate Court reversed a $60 million jury verdict against Mead Johnson in Watson v. Mead Johnson, an NEC case, citing errors in jury instructions on the duty to warn, and sent the case back for a new trial. Apr removed: 10, added: 9, 2026: removed: Press added: French press reports said added: that Danone was removed: exploring added: studying a bid for Mead Johnson removed: Nutrition, with Reckitt reportedly seeking offers of around $7 billion, far below the nearly $18 billion it paid for the business in 2017. added: Nutrition. Neither company confirmed talks, and no sale price was confirmed. Feb 20, 2026: Reckitt paid a £1.6 billion special dividend (235 pence per share) to shareholders removed: following added: after the Essential Home removed: sale, alongside a added: sale. A 24-for-25 share removed: consolidation. added: consolidation took effect on February 2, 2026. Dec 31, 2025: Reckitt completed the sale of its Essential Home business (Air Wick, Calgon, Cillit Bang) to Advent International for added: up to $4.8 billion, removed: retaining added: including up to about $1.3 billion of contingent and deferred payments. Reckitt kept a 30% stake in the acquisition vehicle.