Why Haleon Share Price May Push Past 300p

Summary:

Thirteen weeks after Haleon's share price started trading, the company’s performance has largely been a disappointment.

Thirteen weeks after Haleon’s share price started trading, the company’s performance has largely been a disappointment. At some point, it was trading at a price level of almost 240p, having opened the markets trading at 330p, a drop of 26 per cent.

However, in the past few weeks, the share price has started to show signs of recovery, with prices rising to the current price of 270p, an 11 per cent increase from its September price lows. The company’s operating profit was also reported to have grown by 20 per cent in the first six months of the year in a report released last month, which may have contributed to the current company’s recovery. The financial report also showed the company’s revenue had risen by 13.4 per cent to £5.18bn, led by an 11.6 per cent uptick in organic revenues.

Therefore, despite Haleon’s slow start in the markets, it showed investors that it could meet expectations with no downside surprise. The company came into existence as a result of GSK, a pharmaceutical giant, splitting into two. Today, GSK’s focus has shifted to vaccines and speciality medicines. Haleon, on the hand, is a cash-generative business that offers attractive investment opportunities to investors looking for sustainable growth. It has also taken ownership of big-name brands, including Aquafresh, Panadol and Nicorette.

Haleon Share Price Analysis

Haleon is down by a percentage point this week, extending a bearish trend that started last week. However, despite the drop, Haleon’s share price remains in a long-term bullish trend. Therefore, the current price drop may be a result of price correction.

There is a high likelihood that we might start to see Haleon’s share price resuming its long-term bullish push. If that happens, I expect the company’s share price to trade above the September price high of 290p and possibly push past 300p. A trade below 250p will invalidate my bullish analysis.