Medium term guidance: a thorn in the side

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Haleon

Medium term guidance: a thorn in the side

Reiterate Rating: NEUTRAL | PO: 420.00 GBp | Price: 363.30 GBp

North America acceleration

03 August 2026

Haleon delivered OG of 3.1% in Q2 (in line with consensus) with North America

accelerating to 3.1% (cons 2.5%) vs 1.0% in Q1, with oral care, pain relief and digestive

health growing mid single digit. EMEA Latam was weaker than expect at +1.7%

(consensus 2.1%) whilst APAC was in line at +5.4%. China was the standout with high

single digit OG growth (low double digit excluding Respiratory Health) By product both

Pain Relief (+4.6%) and Digestive Health (+5.5%) accelerated meaningfully. Respiratory

Health decline accelerated to -6.5%, partially driven by a meaningful drop in China (we

estimate -30%) but the decline was in all regions. Operating margin was up 160bps

(70bps ahead of consensus), driven by supply chain savings, and led to a 3% EPS beat.

Haleon expects to deliver high single digit Ebit growth at constant currency in H2 26E.

Guidance of OG of 3-5% was reconfirmed.

Equity

Medium term guidance still in the spotlight

Valuation upside limited

We increase our EPS by 2%/2%/3% for 26E/27E/28E mainly to reflect a higher

operating margin and reiterate our Neutral rating. We increase our PO by 5% to

GBp420/$11.3 to reflect our revised forecasts as we keep our WACC and long-term

growth rate unchanged. The stock trades on 14.7x EV/Ebit 2026E, a 2% premium to

European Food HPC for similar 27E/28E Ebit CAGR. We think Danone (13.8x) and

Unilever (14.1x) (both Buy rated) offer better value with less risk of a guidance

downgrade.

* For full definitions of iQ method

SM

(GBp)

Previous

Price Obj.

400.00

420.00

2026E Rev (£m)

11,392.1

11,410.2

2027E Rev (£m)

11,832.2

11,886.9

2028E Rev (£m)

12,131.6

12,273.1

2026E EBITDA (£m)

3,044.6

3,113.6

2027E EBITDA (£m)

3,209.8

3,282.7

2028E EBITDA (£m)

3,341.5

3,435.4

7.85

8.01

2026E DPS

Haleon medium term organic growth guidance of 4-6% is likely to remain a debate post

Q2. In a quarter where cold and flu is not playing a role the group only delivered 3.1%

organic sales growth. Even excluding the performance of the Respiratory division, the

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