Reckitt Benckiser Group reported strong first-half results, with organic sales growth of 4.2% and adjusted EBIT margin of 25.9%, exceeding expectations. Full-year guidance was raised, leading to a 10% increase in shares on July 24. The company’s focus on reducing fixed costs and reinvesting in marketing is paying off, with positive results seen in competitiveness and market share gains.

The solid organic growth was driven by a 12.8% increase in emerging markets, supported by innovation and strong execution. While volumes improved in Europe and North America, the consumer environment in developed markets remains challenging. The company’s agreement to sell the essential home business signifies a milestone in simplifying the group and sharpening its strategic focus.

Reaffirming a fair value estimate of GBX 6,500 for Reckitt Benckiser Group, shares are currently undervalued by about 15%. The stock has shown a 23% increase over the past year, reflecting progress in restoring operating margins and potential for mid-single-digit net revenue growth. The company’s focus on cost reduction and marketing reinvestment is yielding positive results, with gains in competitiveness and market share.

Read more at Morningstar: Core Strength Shines Through in Growth, Margin and Market Share Gains