Reckitt Benckiser shares drop almost 2% after completion of £1bn buyback and mixed technical outlook

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Reckitt benckiser slips 1.61% today

Highlights

Reckitt Benckiser completed a £1 billion buyback, repurchasing 11.1 million shares at an average price of £48.55, now held in treasury.
Core Reckitt reported 1.3% like-for-like net revenue growth, supported by emerging markets, with Europe and North America declining.
Shares show short-term bullish momentum but indicators flag overbought conditions, with a trading range forecast at GBX4,995–5,256 and odds favoring near-term consolidation.

Treasury share additions persist amid mixed regional revenue trends

Reckitt Benckiser completed the last stage of its £1 billion share buyback, repurchasing 11,122,383 shares at an average price of £48.55 between March 9 and June 15, with these shares now held in treasury. The company reported 635,054,993 voting rights as of July 1, 2024. Its half-year results are scheduled to be released on July 29, 2024, and earlier disclosures indicated 1.3% like-for-like net revenue growth for Core Reckitt, with gains in Emerging Markets and declines in Europe and North America, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, views Reckitt Benckiser's price action as vulnerable in the near term despite recent buyback efforts. He notes the short-term technical support above the 20- and 50-day moving averages has done little to change a subdued long-term trend. Kharitonov highlights the fading momentum, overbought indicators, and persistent selling pressure after the buyback completion. He warns that recent net revenue growth has not translated into sustainable confidence, especially with ongoing weakness in developed markets. "Short-term buyers may be active, but I remain skeptical of a sustainable rally unless key resistance at GBX5,162 is reclaimed and held."

Viktoras Karapetjanc, expert at Traders Union, sees opportunity in Reckitt Benckiser's current setup. He points out that the just-concluded £1 billion share buyback demonstrates management’s commitment to capital returns. The bullish structure above GBX4,808 and GBX4,698 remains intact, supporting optimism for further growth. Karapetjanc highlights the upcoming half-year results as a potential positive catalyst, especially given solid performance in Emerging Markets. "I expect higher prices ahead as the market offers multiple setups for upside, with consolidation seen as a launchpad for the next move upward."

Parshwa Turakhiya, analyst, focuses on sentiment-driven shifts and technical patterns in Reckitt Benckiser. He finds that short-term buyers have dominated, but overbought readings and faded momentum raise caution about immediate upside. Turakhiya suggests the stock is likely to consolidate around current levels barring strong news, with clear breakout and breakdown triggers set at GBX5,162 and GBX5,118 respectively. "The next five sessions look primed for tactical trades — I’d watch for volatility and quick sentiment swings around key technical levels."

Short-term bullish bias persists while long-term signals overextended

Reckitt Benckiser is trading above its 20-day and 50-day moving averages at GBX4,808 and GBX4,698, respectively, but remains below the 200-day average at GBX5,707. This setup supports short- and medium-term bullish momentum, while the long-term trend stays subdued. Immediate technical levels include resistance at GBX5,162 and support at GBX5,118. Momentum signals are mixed: MACD shows ongoing upside, but ADX indicates trend strength is fading. RSI, Stochastic RSI, and CCI are overbought, while BBP and the Awesome Oscillator also signal strong buying but with stretched conditions. The last trade was at GBX5,122, near session lows after an intraday drop, showing amplitude of 0.86%. Indicators suggest buyers are dominant in the short term, but overbought readings and the drop from session highs signal the move may be losing steam with consolidation likely.

Previously it was reported that Reckitt Benckiser was displaying short- to medium-term technical strength following the completion of its £1 billion share buyback, while longer-term momentum remained constrained. The current price action adds a note of caution as momentum falters and overbought signals emerge, making traders increasingly sensitive to a potential break of support or a shift in trend direction in the approaching weeks.

Source of Data: RKT Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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