On Monday, Morgan Stanley updated its forecast for Haleon Plc (NYSE:HLN) shares, adjusting the price target to $9.15 from the previous $9.30, while maintaining an Overweight rating. The revision comes ahead of the company's first-quarter 2024 results, which are scheduled to be released on May 1.
The firm anticipates Haleon's organic growth for the first quarter to be at +3.3%, a slight downtick from the earlier projection of +3.5% but still marginally above the consensus of +3.2%.
The lowered expectations for organic sales growth (OSG) in North America to +1.5% from +2% were attributed to challenging comparisons in the Respiratory and Pain Relief segments. Despite this adjustment, Morgan Stanley's forecast for the full year 2024 remains optimistic, with an expected OSG of +5.0%, outpacing the consensus of +4.7%. Additionally, the projected Adjusted EBIT margins are anticipated to align with the consensus at 22.6%.
Morgan Stanley indicated that the overall operating assumptions for Haleon have not significantly changed. However, the firm's earnings per share (EPS) estimates for the fiscal years 2024 and 2025 have been slightly increased by +1%. This adjustment is primarily due to foreign exchange mark-to-market (FX M2M) movements.
While the American Depositary Receipt (ADR) price target has been adjusted to reflect the recent USD/GBP foreign exchange fluctuations, Morgan Stanley's price target for the company's shares listed in the UK remains steady at 365 GBp. This update provides investors with the latest expectations from Morgan Stanley regarding Haleon's financial performance as the company approaches its quarterly earnings report.
InvestingPro Insights
As Haleon Plc (NYSE:HLN) gears up to release its Q1 2024 results, a glance at the InvestingPro data and tips offers a deeper understanding of the company's financial health and market position. The firm boasts a robust gross profit margin of 61.59% for the last twelve months as of Q1 2023, signaling efficient operations and a strong competitive edge in its sector. This impressive margin is a testament to Haleon's operational excellence and is a key metric for investors to consider.
Despite trading near its 52-week low, analysts remain confident in Haleon's prospects, predicting the company to be profitable this year. This sentiment is backed by the company's performance over the last twelve months, where it has been profitable, reinforcing the positive outlook. With a market capitalization of $37.58 billion and a P/E ratio adjusted for the last twelve months at 24.03, Haleon presents an interesting opportunity for investors seeking a blend of value and growth potential.
For those looking to delve deeper into Haleon's investment potential, there are additional InvestingPro Tips available that could provide further insights into the company's performance and future outlook. And, to enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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