Haleon Share Price Stages a Comeback Ahead of Earnings. Is it a Buy?
The Haleon share price has bounced back after its disastrous debut at the London Stock Exchange (LSE) earlier this month. The HLN stock price has risen to 316p, which is about 8.6% above its all-time low of 291p. Focus now shifts to the company’s first half trading update as a publicly traded company.
Haleon trading update ahead
Haleon is a large publicly traded company that was listed on the LSE early this month. The company was born from the demerger from GlaxoSmithKline and Pfizer, two of the largest healthcare companies globally.
Haleon is now the biggest consumer health company in the world, with over £1.5 billion in free cash flow and £9.5 billion in sales. It will be overtaken in the next few months by Johnson & Johnson’s company which will go public in the next few months. Haleon owns some of the most popular brands such as Parodontax, Panadol, Sensodyne, Aquafresh, and Centrum, among others.
Haleon share price will be in the spotlight as the company publishes its first results as a publicly traded company. In a recent statement, the management said that the firm expects to deliver annual organic sales growth of between 4 and 6% in the medium term. It expects to have an initial dividend that will be at the lower end of the 30-50% pay-out ratio.
Analysts believe that Haleon is a good investment for two main reasons. First, it has a strong global market share in a large industry that is expected to weather the current inflationary trends. Second, historically, spin-offs tend to do better than their parent companies since they are more agile as independent companies. For example, Mondelez has significantly outperformed Kraft Foods, while Philip Morris has outperformed Altria in the past five years. In a recent note, an analyst at Quilter said:
This is an attractive industry and business to have exposure to, given its defensive characteristics at a time where volatility is upsetting markets.”
Haleon share price forecast
The 5-minute chart shows that the Haleon share price has been in a slow uptrend in the past few days as investors wait for its initial results as a publicly traded company. The stock is trading at 316p, which is slightly above the 25-day moving average. It is also above the important resistance level at 315p, which was the highest level on July 20th.
While it is too early to tell, there is a likelihood that the stock will keep rising after the results. If this happens, the key level to watch will be at 320p, which was the highest level on July 18th. A drop below 312p will invalidate the bullish view.