Barclays has revised its stance on Haleon PLC (NYSE:HLN) (LSE:HLN), lifting the stock's rating from Equalweight to Overweight and adjusting the target price upward to GBP4.20 from GBP3.80. This adjustment follows observations of enhancements in Haleon's key US business, which represents approximately 35% of the company's overall revenue. Haleon, a pharmaceutical and consumer healthcare enterprise valued at $45.44 billion, currently trades near $10.33 per share. This price is slightly below the firm's InvestingPro Fair Value estimate, with the stock carrying a price-to-earnings (P/E) ratio of 19.8.
Barclays identified the US market as a focal point of concern, given the company’s struggles with inventory destocking during the first half of 2025, particularly in the drug store channel. However, efforts to remedy these stock levels are anticipated to conclude by the end of the fourth quarter, paving the way for more favorable sales trends.
Looking ahead, the investment bank forecasts Haleon achieving 1.5% organic sales growth in the US in 2026. This projection factors in easing year-over-year comparisons, heightened innovation initiatives, and strengthened execution driven by new leadership in the US operations. While there remains some divergence from Bloomberg’s sell-side consensus, which predicts growth exceeding 2%, Barclays underlines that despite a soft cold and flu season, Haleon's US business trajectory appears encouraging.
On the earnings side, Barclays expects 2026 to be "a very good year" for Haleon, projecting earnings per share (EPS) growth of 10%. This optimism is grounded in the completion of dilutive asset disposals and the realization of significant productivity savings. The firm additionally notes that Haleon intends to shorten its working capital cycle by 30%, which should improve cash flow dynamics.
Supporting this outlook, InvestingPro data reflects a PEG ratio of 0.54 for Haleon, implying the stock is trading at a relatively low P/E multiple relative to near-term earnings growth prospects. The diluted EPS for the trailing twelve months stands at $0.23.
These operational improvements are expected to elevate Haleon’s annual free cash flow generation to exceed £2 billion. This upgraded cash flow capacity is projected to enhance the company’s ability to return value to shareholders through dividends and share repurchases. Presently, Haleon enjoys a 7% free cash flow yield and has consecutively increased dividends for three years, currently offering a yield of 1.1%.
For investors seeking in-depth financial insights, Haleon is rated "GOOD" according to InvestingPro metrics. Comprehensive analyses, including over 30 key performance indicators and ProTips, are available for Haleon and an extensive universe of over 1,400 stocks.
Recent corporate developments include several notable announcements from Haleon. Chief Financial Officer Dawn Allen is slated to assume the Chair position of the Audit & Risk Committee at ITV plc effective March 5, 2026. Additionally, executives Adrian Morris and Tamara Rogers have undertaken stock acquisitions under the company’s Share Reward Plan, acquiring 34 partnership shares plus 34 matching shares each.
The company also updated details on its share capital and voting rights as of December 31, 2025, reporting 8,952,353,648 ordinary shares issued, with 45,745,646 held as treasury shares. The tally of shares with voting rights stands at 8,906,608,002, a figure relevant for shareholder notification obligations.
Furthermore, Haleon announced governance changes effective January 2026: Alan Stewart will assume the role of Senior Independent Director while continuing as Chair of the Audit & Risk Committee. These adjustments reflect ongoing refinements in the company's leadership structure and corporate governance.