Is this hated FTSE 100 stock suddenly a screaming buy for me after jumping 10% this morning?

I looked at the old one on August 14th FTSE100 Darling Reckitt (LSE: RKT) and brutally declared that I would not touch him with a barge pole.

I’ve been watching the consumer goods giant for years because it has so much to recommend it. Their brands include hygiene, health and nutrition. Air Wick, Kalgon, Cillit Bang, come to an end, harpy, Nurofen, disappear and much more.

Reckitt may be headquartered in humble Slough, but it sells its products in almost every country in the world. Investors do this solid defensive stockWith a reliable dividend and growth potential in good times. The share price then fell by a third in just two years.

Share price took a hit

Why? Legal issues in the US are a constant problem for multinational companies in the UK.

This was driven by Reckitt’s ill-fated $16.6 billion acquisition of US-listed baby milk formula maker Mead Johnson Nutrition in 2017. The board not only overpaid, but also had a legacy of legal claims in particular. enfamil formula.

In March, an Illinois court awarded $60 million in damages to a woman whose premature baby died after consuming alcohol. enfamil. This dropped Reckitt’s share price by £5.4bn in one day.

More than 1,000 similar claims have been filed in US courts targeting both Reckitt and its rival Abbott laboratories. Reckitt also fell out in July, when Abbott was forced to pay a total of $495 million after a US jury found that the baby formula caused a girl to develop a dangerous intestinal disease.

Bloomberg Intelligence estimates that firms face a total liability exposure of $2.5 billion. Both companies argued that the claims were flawed and not based on scientific evidence, but that is the responsibility of the courts.

As if that wasn’t enough, a hurricane hit production at Reckitt’s Mount Vernon facility in the US, revealing management accounting problems in the Middle East.

So even though Reckitt shares were priced at just 12.97 times earnings in August and had a yield of more than 4.5%, I didn’t want to know.

But finally, finally… some good news. Yesterday (Oct. 31), a state court in St. Louis, Missouri, dismissed a lawsuit alleging that Mead Johnson and Abbott formulas caused severe inflammation in the intestine.

Shares appear to be reasonably valued

Reckitt’s shares are up more than 10% in early trading today. They are still down 14.87% over 12 months and look attractive at 14.45 times earnings and return 3.79%.

But do you know? I still won’t buy them.

Yes, the legal win was positive, but there are many more cases on the way. And yes, production has rebounded from the hurricane in the US, and Reckitt’s hygiene and health divisions are also progressing well.

However, sales are not exactly booming. Reported group net income is down 3.8% year-to-date, mostly due to unfavorable currency changes and a smaller net impact from mergers and acquisitions.

Even if Reckitt were flying high on all fronts, I wouldn’t touch it until the legal shadow is lifted. I keep my barge pole handy.