On Tuesday, Goldman Sachs revised its rating on Haleon PLC (HLN:LN) (NYSE: HLN) stock, shifting from "Buy" to "Neutral." Accompanying the downgrade, the investment firm also increased the price target for the consumer healthcare company to £3.80, up from £3.60.
The adjustment by Goldman Sachs comes after Haleon's shares demonstrated significant outperformance in the market. The company's stock value rose by 11.4% following the financial results for the fiscal year 2023, contrasting with a 0.9% decline in the Goldman Sachs Staples index. Over the past month, this trend has been particularly pronounced.
Haleon's current market position reflects a 5% premium compared to the Staples index, which is a notable shift from its historical average, where it typically traded at a 16% discount. Goldman Sachs cited this change in market valuation as a key reason for the downgrade.
According to the investment firm's analysis, Haleon has reached several important milestones that have contributed to its recent stock performance. However, analysts at Goldman Sachs believe there are fewer drivers to propel the stock's price in the near term.
One factor potentially impacting the stock's short-term outlook is the remaining 22.6% stake held by Pfizer (NYSE:PFE), which is seen as an overhang on the share price.
Goldman Sachs highlighted Haleon's trading multiples, noting that the company is trading at 19 times its estimated price-to-earnings (P/E) for the calendar year 2025 and 13.6 times its enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). Despite the stock's strong performance and the increased price target, the firm's outlook suggests a more cautious stance moving forward.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.