Haleon, the FTSE 100 consumer health group behind Sensodyne, Panadol and Centrum, saw its shares fall around 16% yesterday after it cut guidance. Analysts say the real question is whether its medium-term target of 4% to 6% organic sales growth still stands.
RBC Capital Markets, which has a Sector Perform rating, cut its price target to 310p from 390p. The broker said Haleon had been "remarkably clumsy" in its communication, guidance and operational performance, and that "the jury's out" on the target.
It now forecasts sales growth of around 3% in 2027 and 2028, below management's range, and expects the adjusted operating margin to slip from 24.1% this year to 22.5% by 2028.
RBC said it did not think the share price reaction was unduly harsh, and pointed to the risk that Haleon needs significant retooling to get growth back.
Deutsche Bank upgrades
Deutsche Bank upgraded the shares to Hold from Sell, with a 310p target, down from 320p. The shares closed at 317.7p.
Analyst Tom Sykes blamed structural industry changes, including a shift in sales channels, as well as poor strategy and execution. He said Haleon needs a strategic reset, with too much of what consumers need and not enough of what they want.
He argued the focus on operating profit growth, and the missed growth in categories such as hydration, had been missteps, and that Haleon should step up innovation and focus more on "Consumer" and less on "Health".
JP Morgan stays cautious
JP Morgan is Underweight. Analyst Celine Pannuti said Haleon had been "sleepwalking" into an equity story reset since its post-IPO debut, with margin misses and weak volumes.
She noted organic growth sliding from 4.9% in 2024 to 3.0% in 2025 and an expected 2.6% this year, with volume growth of just 0.6%. Even a 3% to 5% range may look hard, she said, and propping up margins while sales slow is counterintuitive.
JP Morgan sees no mandate for big acquisitions, and does not think Haleon looks an attractive bid target given its growth problems.
At 14.6 times 2027 earnings, the stock is still rich for 2% to 3% growth, in her view, with the focus turning to downside risk to consensus earnings forecasts.
