Evercore ISI analyst Robert Ottenstein initiated coverage of Reynolds Consumer Products (REYN) with an Outperform rating and $35 price target. The stock is a "contender for the blue-chip, bond-proxy status" that Staples shares such as Kimberly-Clark (KMB) and Clorox (CLX) have given Reynolds' leading position in mature categories with sticky demand and high barriers to entry, Ottenstein tells investors.
FY21 consensus $7.35. Now sees FY21 organic sales decline of 0%-2% vs. prior view of organic sales growth of 0%-1%. FY21 revenue consensus $19.69B. Chairman and CEO Mike Hsu said, "Our second quarter reflects continued pandemic-driven volatility. We are facing significantly higher input costs and a reversal in consumer tissue volumes from record growth in the year ago period as consumers and retailers in North America continued to reduce home and retail inventory. While we look forward to a return to a more normalized environment, we have moved decisively to take pricing actions to mitigate inflationary headwinds and continue to prudently manage costs. We remain confident in our strategy and in our fundamental brand performance. Our personal care business is performing well, and we continue to improve our market positions in key markets and realize robust growth across Developing and Emerging Markets." Hsu continued, "We will continue to execute K-C Strategy 2022. While our updated outlook reflects a more challenging near-term environment, we are taking appropriate actions and remain confident in our strategies to create long-term shareholder value."