Reckitt Benckiser Group plc : Bullish trend line as argument
By Camille Chretien
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
GBX 4,694 | GBX 0 | GBX 4,595 | -100% |
The company is highly profitable with 19% of net margin in 2012 compared to 8.8% in average for the sector. Further, the financial situation is healthy with a leverage (net debt/EBITDA) of only 0.89x in 2012. Eventually, the stock seems under-valued with a P/E ratio of 17.8x estimated for 2013 (sector : 20.8x).
Technically, the trend is bullish in the long term with well oriented weekly moving averages. However, the stock has known a slight consolidation phase and is now back to a bullish trend line, corresponding to the 100-day moving average. Thus, the share may bounce towards its GBp 4950 mid-term resistance.
As a consequence, it seems interesting to take a long position at the current price. The first bullish target is GBp 4950. A stop loss must be set below the bullish trend line, currently around GBp 4670.