Morgan Stanley has upgraded its rating for Haleon (HLN, Financial) from Equal Weight to Overweight, adjusting the price target to $11.25, up from a previous $10.65. The investment firm values Haleon's strong presence in defensive market segments. With greater transparency regarding its margin expansion, Haleon is on track to achieve high single-digit earnings growth annually from 2026 to 2030, outpacing its competitors. In an environment marked by economic uncertainty, Morgan Stanley regards Haleon as an appealing defensive choice.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Haleon PLC (HLN, Financial) is $10.00 with a high estimate of $11.81 and a low estimate of $6.01. The average target implies an downside of 5.35% from the current price of $10.57. More detailed estimate data can be found on the Haleon PLC (HLN) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Haleon PLC's (HLN, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Haleon PLC (HLN, Financial) in one year is $8.83, suggesting a downside of 16.46% from the current price of $10.57. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Haleon PLC (HLN) Summary page.
HLN Key Business Developments
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Haleon PLC (HLN, Financial) reported strong momentum in emerging markets, particularly in India and China, contributing to overall growth.
- The oral health division is performing well, with plans to expand distribution and geographical rollout, supported by strong innovation.
- The company is confident in achieving 4% to 6% growth for the full year, driven by innovation and market expansion strategies.
- Haleon PLC (HLN) has increased A&P investment by 10.2% to support growth, particularly in expert coverage and sampling.
- The company has a clear capital allocation strategy, including a GBP500 million share buyback, while maintaining headroom for bolt-on M&A opportunities.
Negative Points
- The company experienced a low cold and flu season, leading to higher inventory levels and impacting respiratory health and pain relief categories.
- FX headwinds are expected to continue in 2025, affecting both top-line and margin, with emerging markets contributing to currency fluctuations.
- The Eroxon brand launch has been slower than expected, impacting initial trial and results, though it is incorporated in the full-year guidance.
- There is pressure on inventory levels in the US drug channel due to struggling retailers, affecting cash management and inventory dynamics.
- The company faces challenges in working capital optimization, particularly in inventory management, which remains a significant opportunity for improvement.
