London, January 16, 2026, 09:15 GMT — Regular session
- Reckitt shares held steady in early London trading, following a broker downgrade that raised questions about the group’s reset after recent asset sales.
- RBC downgraded its rating, citing concerns over 2026 margins and the ongoing U.S. infant formula litigation.
- Investors are focused on the late-January voting deadlines related to Reckitt’s upcoming special dividend and share consolidation.
Reckitt Benckiser Group RKT.L shares held steady at 6,146 pence by 0835 GMT, after a new broker downgrade renewed scrutiny on the consumer health firm’s capital return strategy. The FTSE 100 slipped roughly 0.2%.
This move is crucial as Reckitt aims for a fresh start following the sale of its Essential Home business. Investors are now focused on what the leaner company can achieve by 2026. While a one-time cash payout might boost the stock, it raises fresh concerns about costs, margins, and potential legal risks.
RBC Capital Markets downgraded Reckitt from “Outperform” to “Sector Perform,” lowering its price target to £62 from £64. Analyst James Edwardes Jones flagged that the bank’s updated forecasts were still a work in progress, factoring in a 60-basis-point hit to core EBIT margin by 2026—a basis point being one-hundredth of a percentage point. He maintained the assumption of a £2 billion settlement related to U.S. necrotising enterocolitis (NEC) litigation tied to Mead Johnson. Edwardes Jones also noted that Reckitt’s valuation appeared roughly in line with peers like Haleon and Nestle. Investing.com
EBIT margin measures operating profit as a percentage of sales, before deducting interest and taxes. “Stranded costs” refer to overhead expenses that remain even after a business unit has been sold off or closed.
Reckitt revealed a modest extension of its share buyback, acquiring 48,590 shares on January 15. The volume-weighted average price stood at 6,173.07 pence, with the repurchased shares set to be held in treasury.
The company is set to pay a special dividend of 235 pence per share, totaling about £1.6 billion. It’s also planning a 24-for-25 share consolidation to keep the share price roughly steady after the payout. Proxy instructions must be submitted by 8:00 a.m. on January 23, with the shareholder vote scheduled for January 27. The dividend is expected to be paid on February 20, and shares will trade ex-special dividend starting February 2.
Still, the scenario carries risks. A weaker consumer environment, higher costs lingering post-disposal, or a negative shift in U.S. litigation could all disrupt the valuation argument, even if the cash return proceeds as expected.
The upcoming checkpoint is the shareholder meeting set for January 27. After that, all eyes turn to Reckitt’s full-year results on March 5, which will offer fresh guidance and the first clear view of earnings following recent portfolio shifts.
