03 May 2023
If you are covering Haleon’s Q1 trading update and the news that Pfizer will begin selling its stake, please see comment from Chris Beckett, head of equity research at Quilter Cheviot:
“Haleon, the consumer healthcare business that demerged from GSK in July 2022, has seen its Q1 trading statement overshadowed by news that Pfizer will begin selling its 32% stake in the company within months, but in a ‘slow and methodical manner’.
“Haleon has largely recovered from falls in its share price following the Zantac litigation and has benefited from a general sector rerating. The stock trades on 19x this year's expected earnings which represents an unjustified, but reduced, discount to the sector and drives our buy recommendation. However over the short term the stock overhangs from Pfizer and GSK's stakes will constrain progress.
“Operating profits of £691m slightly beat some measures of consensus but missed others. This represents 10% growth or 3% in constant currency terms. Operating margins came in at 23.1%, down 90bps year-on-year as sales leverage was more than offset by standalone costs.”
