Unilever (UL) AI Stock Analysis

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Unilever

(NYSE:UL)

76Outperform

Unilever demonstrates robust financial performance with steady revenue and operational efficiency. The stock benefits from positive technical momentum and a reasonable valuation, despite some challenges in certain markets and inflationary pressures. The overall outlook remains positive, supported by strong earnings performance and strategic growth initiatives.

Unilever (UL) vs. S&P 500 (SPY)

Market Cap

$143.95B

Dividend Yield3.21%

Average Volume (3M)2.88M

Price to Earnings (P/E)23.2

Beta (1Y)0.19

Revenue Growth1.99%

EPS Growth-10.59%

CountryUS

Employees115,964

SectorConsumer Defensive

Sector Strength86

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)2.49

Shares Outstanding2,504,861,300

10 Day Avg. Volume3,843,181

30 Day Avg. Volume2,878,680

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.25

Price to Cash Flow (P/CF)11.10

P/FCF Ratio14.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$70.00

Price Target Upside17.81% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Unilever Business Overview & Revenue Model

Company DescriptionUnilever (UL) is a leading multinational corporation that operates in the fast-moving consumer goods (FMCG) sector. The company is renowned for its diverse portfolio of products, which includes food and beverages, cleaning agents, beauty and personal care items, and health and wellbeing products. Unilever's brands, such as Dove, Knorr, Lipton, and Hellmann's, are household names and are sold in over 190 countries worldwide, reaching billions of consumers daily.

How the Company Makes MoneyUnilever makes money primarily through the sale of its extensive range of consumer products across various segments, including beauty and personal care, home care, and foods and refreshments. The company's revenue streams are diversified across these segments, with each contributing significantly to its total earnings. Unilever's global presence and strong brand portfolio enable it to maintain a steady stream of income through both direct sales to retailers and distributors and through online channels. Significant factors contributing to Unilever's earnings include its ability to innovate and adapt to consumer trends, strategic acquisitions that expand its product offerings, and partnerships with large retailers and distribution networks that enhance its market reach. Additionally, Unilever's commitment to sustainability and responsible sourcing strengthens its brand value and appeals to environmentally conscious consumers, further bolstering its revenue potential.

Unilever Financial Statement Overview

Summary

Unilever's financial performance is solid with steady revenue growth and robust operational efficiency. The income statement shows a slight decrease in net profit margin, while the balance sheet maintains a moderate debt-to-equity ratio. Cash flow remains strong, although free cash flow efficiency is declining, indicating areas for improvement in profitability and cash flow.

Income Statement

Positive

Unilever's income statement shows a steady revenue growth with a 1.94% increase in 2024 from the previous year. The gross profit margin is strong at approximately 100%, indicating efficient cost management. However, the net profit margin has slightly decreased to 9.45% from 10.88% in 2023, reflecting challenges in maintaining net profitability. EBIT and EBITDA margins remain robust at 15.47% and 21.42%, respectively, demonstrating solid operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio of 1.60, indicating a balanced use of debt financing. The return on equity (ROE) has slightly declined to 28.74% from 35.84% in 2023, suggesting reduced efficiency in generating profit from shareholders' equity. The equity ratio stands at 25.06%, highlighting a stable capital structure with a focus on equity financing.

Cash Flow

Positive

Unilever's cash flow statement shows a stable operating cash flow to net income ratio of 1.66, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio has decreased to 1.35 from 1.22 in 2023, which could signal declining free cash flow efficiency. The free cash flow growth rate shows a slight decrease, reflecting challenges in maintaining free cash flow levels.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
60.76B	59.60B	60.07B	52.44B	50.72B
	Gross Profit
60.76B	25.18B	24.17B	22.18B	22.04B
	EBIT
9.40B	10.07B	9.64B	9.64B	9.36B
	EBITDA
13.01B	11.99B	10.71B	10.82B	10.72B
	Net Income Common Stockholders
5.74B	6.49B	7.64B	6.05B	5.58B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.63B	6.11B	5.52B	4.50B	6.30B
	Total Assets
79.75B	75.27B	77.82B	75.09B	67.66B
	Total Debt
32.05B	28.59B	28.44B	29.67B	26.77B
	Net Debt
25.92B	24.43B	24.11B	26.26B	21.22B
	Total Liabilities
57.20B	54.50B	56.12B	55.35B	50.00B
	Stockholders Equity
19.99B	18.10B	19.02B	17.11B	15.27B
Cash Flow		Free Cash Flow
7.78B	7.92B	5.83B	6.86B	8.20B
	Operating Cash Flow
9.52B	9.43B	7.28B	7.97B	9.06B
	Investing Cash Flow
-625.00M	-2.29B	2.45B	-3.25B	-1.48B
	Financing Cash Flow
-6.94B	-7.19B	-8.89B	-7.10B	-5.80B

Unilever Technical Analysis

Technical Analysis Sentiment

Positive

Last Price59.42

Price Trends

50DMA

57.90

Positive

100DMA

57.49

Positive

200DMA

58.83

Positive

Market Momentum

MACD

0.49

Positive

RSI

60.34

Neutral

STOCH

84.36

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UL, the sentiment is Positive. The current price of 59.42 is above the 20-day moving average (MA) of 59.08, above the 50-day MA of 57.90, and above the 200-day MA of 58.83, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 84.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UL.

Unilever Risk Analysis

Unilever disclosed 14 risk factors in its most recent earnings report. Unilever reported the most risks in the “Ability to Sell” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Unilever Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CL	79 Outperform	$72.34B	25.41	704.02%	2.26%	3.30%	26.83%
PG	78 Outperform	$375.72B	25.53	31.05%	2.54%	0.49%	5.02%
UL	76 Outperform	$143.95B	23.23	30.53%	3.21%	1.99%	-10.59%
CHD	74 Outperform	$25.24B	43.26	14.25%	1.13%	4.08%	-22.34%
KMB	71 Outperform	$44.62B	17.82	290.03%	3.69%	-1.83%	45.13%
KVUE	70 Outperform	$41.61B	40.45	9.87%	3.79%	0.08%	-32.67%
Sector *	62 Neutral	$20.34B	13.97	-16.14%	3.32%	1.30%	5.01%

* Consumer Defensive Sector Average

Performance Comparison

Unilever

59.42

13.28

28.78%

CHD

Church & Dwight

101.91

1.43

1.42%

Colgate-Palmolive

90.23

6.06

7.20%

KMB

Kimberly Clark

135.15

13.40

11.01%

Procter & Gamble

162.32

10.23

6.73%

KVUE

Kenvue, Inc.

21.78

3.07

16.41%

Unilever Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: 1.30% | Next Earnings Date: Jul 31, 2025

Earnings Call Sentiment Neutral

Unilever delivered strong volume-led growth and significant improvements in gross margin and shareholder returns. However, challenges in key markets like China and Indonesia, coupled with inflationary pressures and increased finance costs, present ongoing challenges.

Highlights

Volume-Led Growth

Unilever reported underlying volume growth of 2.9% for 2024, with all five Business Groups contributing to this growth.

Gross Margin Improvement

Gross margin increased by 280 basis points to 45%, exceeding pre-COVID levels in all Business Groups except Ice Cream.

Strong Performance in Beauty & Wellbeing

The Beauty & Wellbeing segment achieved a 6.5% increase in underlying sales growth, driven by 5.1% volume growth.

Significant Capital Return to Shareholders

Unilever returned €5.8 billion to shareholders in 2024 through dividends and share buybacks.

Productivity Program Ahead of Schedule

The program led to a reduction of 4,300 full-time roles by the end of 2024, ahead of the planned reduction of 7,500 roles by the end of 2025.

Strong Performance in North America

North America saw a 7% growth with volumes in excess of 6%, reflecting the strong performance of Wellbeing and Prestige segments.

Improved Cash Conversion

Cash conversion was strong at 106%, above the long-term ambition of around 100%.

Lowlights

Challenges in China

China experienced mid-single-digit declines due to market weakness and a transition to tailored customer development and digital routes.

Subdued Growth in Ice Cream

Ice Cream experienced a 3.7% underlying sales growth, with ongoing challenges in achieving gross margin improvements.

Increased Net Finance Costs

Higher interest rates impacted net finance costs, which were 2.5% of average net debt.

Inflationary Pressures

Significant inflation in key materials like cocoa and dairy expected to impact 2025, influencing pricing strategies.

Softness in Indonesia

Indonesia saw an 8.7% decline due to longstanding portfolio and brand proposition issues.

Company Guidance

In the 2024 fiscal year, Unilever reported a robust performance characterized by volume-led growth and notable improvements in gross margin, which increased by 280 basis points to 45%. This expansion exceeded pre-COVID levels across all business groups except Ice Cream, facilitating a €0.9 billion increase in brand and marketing investment to 15.5% of group turnover. The company achieved an underlying sales growth of 4.2%, driven primarily by a 2.9% increase in volume, with price contributing 1.3%. Unilever's 30 Power Brands, representing over 75% of group turnover, saw a 5.3% underlying sales growth, propelled by a 3.8% increase in volume. The company completed a significant portfolio shift with the separation of its Ice Cream business and reduced full-time roles by 4,300, with plans for a total reduction of 7,500 by 2025. Unilever also returned €5.8 billion to shareholders through dividends and buybacks. Looking ahead, Unilever anticipates a balanced contribution between volume and price growth in 2025, with a modest improvement in underlying operating margin expected in the latter half of the year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.