Unilever (UL) AI Stock Analysis

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Unilever

(NYSE:UL)

Rating:76Outperform

Price Target:―

Unilever's overall stock score is driven by strong financial performance and a positive technical outlook. While valuation concerns exist due to a high P/E ratio, the company's robust dividend yield and strategic growth initiatives provide a counterbalance. The earnings call further supports Unilever's resilience in overcoming market challenges.

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

Market Cap

$154.41B

Dividend Yield3.31%

Average Volume (3M)1.94M

Price to Earnings (P/E)25.2

Beta (1Y)0.14

Revenue Growth1.99%

EPS Growth-10.59%

CountryUS

Employees115,964

SectorConsumer Defensive

Sector Strength70

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)1.42

Shares Outstanding2,454,584,700

10 Day Avg. Volume2,049,892

30 Day Avg. Volume1,937,552

Financial Highlights & Ratios

PEG Ratio0.55

Price to Book (P/B)6.32

Price to Sales (P/S)0.00

P/FCF Ratio20.63

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$73.00

Price Target Upside16.48% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Unilever Business Overview & Revenue Model

Company DescriptionUnilever (UL) is a British-Dutch multinational corporation that operates primarily in the fast-moving consumer goods (FMCG) sector. The company is known for a diverse range of products across multiple categories including food and beverages, cleaning agents, beauty and personal care, and health and wellness. With a portfolio of well-known brands such as Dove, Knorr, Lipton, and Axe, Unilever serves consumers in over 190 countries, striving to meet everyday needs through sustainable living and innovation.

How the Company Makes MoneyUnilever generates revenue through the sale of its wide array of consumer products, which are categorized into three primary divisions: Beauty & Personal Care, Foods & Refreshment, and Home Care. The company earns money by marketing and distributing its products through various retail and e-commerce channels globally. Unilever's revenue model is heavily reliant on its strong brand portfolio and extensive distribution network that ensures widespread availability of its products. The company also benefits from strategic partnerships and acquisitions that enhance its market presence and product offerings. Additionally, Unilever focuses on cost-efficiency, sustainability initiatives, and innovation to drive profitability and long-term growth.

Unilever Key Performance Indicators (KPIs)

Any

Sales Growth by Segment

Sales Growth by Segment
Analyzes sales increases in various product segments, highlighting areas of strong demand and potential for future expansion.

Chart InsightsUnilever's Beauty and Wellbeing segment has been a standout performer with consistent growth, supported by strong volume increases. Despite a recent slowdown, it remains a key driver of Unilever's success. Personal Care and Home Care segments show signs of stabilization after previous volatility. However, the Ice Cream segment faces challenges, with subdued growth and margin pressures, as highlighted in the earnings call. Unilever's strategic focus on volume-led growth and cost efficiencies, alongside a significant capital return to shareholders, underscores its resilience amid inflationary pressures and market challenges in China and Indonesia.

Data provided by:

Main Street Data

Unilever Earnings Call Summary

Earnings Call Date:Feb 13, 2025

(Q4-2024)

% Change Since: 7.74%|

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.

Q4-2024 Updates

Positive Updates

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%.

Negative Updates

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.

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	9.76B	10.76B	8.70B	8.30B
	EBITDA
13.01B	11.06B	10.71B	11.38B	11.38B
	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
30.66B	28.59B	28.44B	29.67B	26.77B
	Net Debt
24.52B	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

Neutral

Last Price62.67

Price Trends

50DMA

62.30

Positive

100DMA

59.71

Positive

200DMA

59.57

Positive

Market Momentum

MACD

0.26

Positive

RSI

49.24

Neutral

STOCH

55.10

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UL, the sentiment is Neutral. The current price of 62.67 is below the 20-day moving average (MA) of 63.15, above the 50-day MA of 62.30, and above the 200-day MA of 59.57, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 49.24 is Neutral, neither overbought nor oversold. The STOCH value of 55.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UL	76 Outperform	$154.41B	25.25	30.53%	3.31%	1.99%	-10.59%
PG	74 Outperform	$380.07B	25.75	30.29%	2.61%	-0.16%	2.74%
KMB	68 Neutral	$44.08B	18.11	229.84%	3.76%	-3.12%	34.80%
KVUE	68 Neutral	$42.31B	39.11	10.22%	3.72%	-1.18%	-29.18%
CHD	65 Neutral	$24.41B	42.52	13.35%	1.19%	2.18%	-26.08%
Sector *	65 Neutral	$8.89B	14.91	4.67%	6.16%	3.60%	-2.89%
CL	64 Neutral	$74.51B	26.03	977.07%	2.23%	0.98%	12.12%

* Consumer Defensive Sector Average

Performance Comparison

Unilever

62.67

8.23

15.12%

CHD

Church & Dwight

97.09

-9.39

-8.82%

Colgate-Palmolive

90.26

-2.36

-2.55%

KMB

Kimberly Clark

130.84

-3.80

-2.82%

Procter & Gamble

160.28

-2.53

-1.55%

KVUE

Kenvue, Inc.

21.45

4.03

23.13%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.