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Reckitt Benckiser Group PLC ADR RBGLY

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Stock PINX Rating as of
$10.35 0.00 (0.00%)
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As of Delayed Price Post-Trading: $10.36 +0.01
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Reckitt: Shares Deep in the Red After US Jury Orders Compensation in Baby Formula Lawsuit

Diana Radu

Wide-moat Reckitt’s shares fell more than 15% in intraday trading March 15 after an Illinois jury ordered subsidiary Mead Johnson to pay $60 million in compensation to a mother whose premature baby died from necrotizing enterocolitis complications linked to consumption of the company's Enfamil infant formula. NEC is an intestinal inflammatory disease that primarily affects premature infants and can lead to death in advanced cases. According to Reuters, this trial is just the first out of potentially hundreds of similar lawsuits brought against Reckitt and Abbott, which produces Similac infant formula. This raises concerns that the total compensation that the company will be mandated to pay could end up substantially higher.

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Price vs Fair Value

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RBGLY is trading at a 39% discount.
Price
$10.35
Fair Value
$55.50
Uncertainty
Medium
1-Star Price
$32.12
5-Star Price
$19.47
Economic Moat
Mzpz
Capital Allocation
Sxmbvzhj

Bulls Say, Bears Say

Bulls

Reckitt’s portfolio is well positioned in categories with long-term structural growth potential.

Bears

The core infant nutrition segment will continue to dampen Reckitt’s growth potential given depressed birthrates in the U.S. Participation in the WIC program is increasingly expensive and potential contract losses could strongly affect revenue.

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Trading Information

Previous Close Price
$10.35
Day Range
$10.27–10.37
52-Week Range
$10.24–16.60
Bid/Ask
$10.32 / $10.40
Market Cap
$36.56 Bil
Volume/Avg
498,190 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
9.19
Price/Sales
2.05
Dividend Yield (Trailing)
4.33%
Dividend Yield (Forward)
4.33%
Total Yield
5.21%

Company Profile

Reckitt Benckiser was formed in 1999 through the merger of the British firm Reckitt & Colman and Dutch-based Benckiser. Recently rebranded under the corporate name Reckitt, it sells a portfolio that includes a variety of household and consumer health brands, such as Lysol, Finish, Durex, and Mucinex, many of which hold the number-one or -two positions in their categories globally. Reckitt has repositioned its portfolio and has entered the infant formula market through the acquisition of Mead Johnson in 2017, expanded its consumer health presence by acquiring Schiff Nutrition, K-Y, and Biofreeze, and has exited the food industry. The firm operates in 60 countries and sells products in more than 200, generating around 35% of sales from emerging markets.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Large Core
Total Number of Employees
40,000
Website
https://www.reckitt.com

Competitors

Valuation

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Metric
RBGLY
PG
UL
Price/Earnings (Normalized)
 9.1924.5916.05
Price/Book Value
 3.437.755.85
Price/Sales
 2.054.641.84
Price/Cash Flow
 11.0619.4214.22
Price/Earnings
RBGLY
PG
UL

Financial Strength

Metric
RBGLY
PG
UL
Quick Ratio
 0.400.400.51
Current Ratio
 0.640.640.76
Interest Coverage
 9.0020.669.28
Quick Ratio
RBGLY
PG
UL

Profitability

Metric
RBGLY
PG
UL
Return on Assets (Normalized)
 8.60%13.58%8.54%
Return on Equity (Normalized)
 26.61%35.76%35.06%
Return on Invested Capital (Normalized)
 14.24%20.36%13.94%
Return on Assets
RBGLY
PG
UL
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