Jefferies analyst David Hayes maintained a Sell rating on Unilever today and set a price target of p3,800.00.
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David Hayes has given his Sell rating due to a combination of factors related to Unilever’s recent performance and future outlook. The company’s organic sales growth, excluding ice cream, fell short of expectations, with a growth rate of 3.1% compared to the consensus of 3.4%. This underperformance in sales growth is a significant concern for investors.
Despite a positive margin beat in the first half and a full-year margin guidance of approximately 19%, which is above the consensus of 18.7%, the lack of sequential increase in the second quarter’s organic sales growth of 1.1% is troubling. Although the company anticipates acceleration in the second half, driven by improvements in India and favorable comparisons in China and Indonesia, the core volumes and organic sales remain critical. The expected earnings per share (EPS) growth of around 2% may not be sufficient to justify a more favorable rating, leading to the Sell recommendation.
In another report released on July 21, RBC Capital also maintained a Sell rating on the stock with a p3,800.00 price target.