Mead Johnson Enfamil Reckitt

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Shares in Reckitt Benckiser have rallied this morning but remain at ten-year lows after the multinational saw £5bn wiped from its value on Friday as investors worried about the group’s exposure to lawsuits in the US.

Reckitt’s Mead Johnson baby formula business was ordered last week to pay $60m in damages to a mother who said her premature baby died of an intestinal disease after being fed Enfamil.

Shares plunged to a ten-year low on Friday in response, closing almost 15% down as the market viewed the verdict as a test case for hundreds of more trials due to come to court surrounding the baby formula.

Reckitt denied its product caused necrotising enterocolitis (NEC) and is considering an appeal.

In a statement to the London Stock Exchange late on Friday afternoon, Reckitt said it stood by the safety of its products.

“We strongly reject any assertion that any of our products cause NEC, a serious gastrointestinal problem that mostly affects premature infants,” the group said.

Reckitt added: “It is important to note that this is a single verdict in a single case and should not be extrapolated.

“This case, and others like it, exclusively involve products used under the strict supervision of neonatologists in neonatal intensive care units and provide lifesaving nutrition options for vulnerable premature infants.

“We are of course, surprised and deeply disappointed with the verdict and will pursue all options to have it overturned.”

Shares climbed 4.3% to 4,657p this morning but remain at lows not seen since 2013.

Analysts at Barclays said Friday’s share price move looked like “a substantial over-reaction”, with the rarity of NEC limiting potential claimant and settlement sizes versus other high profile US lawsuits.

“While full clarity will take time to emerge, precedent suggests investors will feel more comfortable over the coming weeks.”

Morning update

The FTSE 100 opened 0.1% higher at 7,737.08pts this morning.

Other than Reckitt, early risers include Glanbia, up 4.4% to €17.75, HelloFresh, up 4.1% to €7.60, Ocado, up 3.1% to 473.1p, and AG Barr, up 2.9% to 535p.

Shares in Naked Wines slumped 6.7% to 57.9p following a story from Sky News that the company has appointed advisors from Interpath.

Other fallers include Haleon, down 2.1% to 315.7p, Deliveroo, down 1.4% to 116.3p, C&C Group, down 1.2% to 152.9p, and Sainsbury’s, down 1.1% to 248.6p.

This week in the City

There’s not a huge amount in the diary this week on the markets.

Indonesian palm oil producer MP Evans finals and Eagle Eye interims are out on Tuesday morning.

The latest UK inflation figures are due out from the ONS on Wednesday.

Over in the US, General Mills publishes its latest quarterly results on Wednesday.

High street bellwether Next reports its full-year results on Thursday.

Beer and cider supplier C&C Group also puts out a trading statement on Thursday, with the latest interest rates decision from the Bank of England due later in the day.

The latest ONS retail sales data for February and the monthly GfK consumer confidence index are out first thing on Friday, with JD Wetherspoon also publishing interims.