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Unilever plc (UL)
NYSE:UL
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Unilever
(NYSE:UL)
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Rating:69Neutral
Price Target:
$82.00
▲(21.37% Upside)
Action:DowngradedDate:02/18/26
The score is driven primarily by solid underlying financial performance (durable margins and cash generation) and a supportive earnings outlook (volume-led growth, modest margin improvement, and shareholder returns). The biggest constraints are balance-sheet leverage and the reported revenue decline, while technicals show an uptrend but with overbought conditions and valuation that is reasonable but not cheap.
Positive Factors
Cash generation
Unilever's strong free cash flow (€5.9bn; 100% cash conversion, FCF ≈82% of net income) underpins durable capital allocation: funds ongoing dividends, buybacks and productivity spend while supporting M&A and resilience to cyclical shocks, preserving long-term financial flexibility.
Margin expansion & productivity
Sustained margin improvement (underlying operating margin +60bps to 20%) driven by a productivity programme (>€670m delivered) and gross margin gains. These structural efficiency gains support sustainable profitability even with modest top-line growth and selective reinvestment in brands.
Power brands and portfolio pivot
Concentration in stronger, faster-growing Power Brands (30 brands >78% turnover, +4.3% sales) and strategic portfolio rotation (~15% rotated) shift mix toward premium, digitally-native and ecommerce-led assets. This raises structural growth potential and improves brand-driven margins over time.
Negative Factors
Elevated leverage
Leverage has meaningfully increased (net debt €23.1bn; net debt/EBITDA ~2x; debt ≈1.9x equity), reducing financial flexibility for big M&A or shock absorption. Higher indebtedness increases refinancing and covenant risk, constraining strategic optionality over the medium term.
Reported revenue contraction
A sharp reported revenue drop in 2025 (≈-18.8% YoY; turnover €50.5bn) — largely FX and demerger-related — creates uncertainty about revenue durability. While underlying metrics improved, persistent reported declines complicate scale economics and long-term growth visibility for investors and management planning.
Regional & execution weaknesses
Material regional and category execution gaps (Latin America volumes -5.1%; China flat; hair care and Brazil deodorants underperforming) signal operational and demand fragilities. These structural pockets require sustained corrective execution and may pressure growth and margins in key emerging market corridors.
Unilever (UL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$161.14B
Dividend Yield3.74%
Average Volume (3M)3.45M
Price to Earnings (P/E)23.5
Beta (1Y)-0.05
Revenue Growth-0.30%
EPS Growth-14.60%
CountryUS
Employees115,964
SectorConsumer Defensive
Sector Strength42
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)1.75
Shares Outstanding2,180,690,400
10 Day Avg. Volume3,899,225
30 Day Avg. Volume3,448,105
Financial Highlights & Ratios
PEG Ratio1.26
Price to Book (P/B)7.83
Price to Sales (P/S)2.41
P/FCF Ratio19.44
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue3.35
Enterprise Value/Gross Profit3.22
Enterprise Value/Ebitda14.63
Forecast
1Y Price Target
$65.55Price Target Upside-2.98% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Unilever Business Overview & Revenue Model
Company DescriptionUnilever PLC operates as a fast-moving consumer goods company. It operates through Beauty & Personal Care, Foods & Refreshment, and Home Care segments. The Beauty & Personal Care segment provides skin care and hair care products, deodorants, and skin cleansing products. The Foods & Refreshment segment offers ice cream, soups, bouillons, seasonings, mayonnaise, ketchups, and tea categories. The Home Care segment provides fabric solutions and various cleaning products. The company offers its products under the Domestos, OMO, Seventh Generation, Ben & Jerry's, Knorr, Magnum, Wall's, Bango, the Vegetarian Butcher, Axe, Cif, Comfort, Dove, Lifebuoy, Lux, Rexona, Sunsilk, Equilibra, OLLY, Liquid I.V., SmartyPants, Onnit, Hellmann's, and Vaseline brands. Unilever PLC was incorporated in 1894 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyUnilever generates revenue through the sale of its vast array of consumer products across multiple segments. The company's revenue model is primarily based on the retail distribution of its branded goods, which are sold through supermarkets, convenience stores, and online platforms. Key revenue streams include personal care products, which contribute a significant portion of sales, followed by food and refreshments, and home care items. Unilever also benefits from strategic partnerships with retailers and e-commerce platforms, enhancing its market reach and product availability. Additionally, the company focuses on sustainability initiatives, which not only align with consumer preferences but also drive brand loyalty and long-term profitability.
Unilever Key Performance Indicators (KPIs)
Any
Sales Growth by Segment
Analyzes sales increases in various product segments, highlighting areas of strong demand and potential for future expansion.
Analyzes sales increases in various product segments, highlighting areas of strong demand and potential for future expansion.
Data provided by:
The Fly
The FlyUnilever Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational story: broad-based sequential improvement, Power Brands and premium innovations delivering above-market growth, margin expansion, strong productivity progress, solid cash generation and a clearer, sharper portfolio following the Ice Cream demerger. Key challenges remain — notable FX headwinds that materially reduced reported turnover and EPS, regional softness in parts of Latin America and a flat China performance for the year, category-specific execution issues (hair care, deodorants in Brazil) and demerger-related cash impacts. Management provided constructive guidance (underlying sales ~4%, volumes at least 2%, modest margin improvement) and clear priorities (volume-led growth, reinvestment in Power Brands, productivity), suggesting confidence in continued improvement.Q4-2025 Updates
Positive Updates
Underlying Sales and Volume Improvement
Full-year underlying sales growth of 3.5%, with volumes up 1.5% and price contribution of 2.0%. Sequential improvement through the year with Q4 underlying sales growth of 4.2%, volumes 2.1% and price 2.0%.
Power Brands Outperformance
30 Power Brands ( >78% of group turnover) grew underlying sales 4.3% for the year with volumes +2.2%. 2-year CAGR for Power Brands is 5% (including 3.4% volume growth). Q4 Power Brand growth was 5.8% with volumes +3.5%.
Strong Category Performance — Beauty & Wellbeing and Personal Care
Beauty & Wellbeing underlying sales +4.3% (volumes +2.2%, price +2.1%). Personal Care underlying sales +4.7% (price +3.6%, volumes +1.1%). Personal Care underlying operating profit EUR 3.0bn; margin improved 50 bps to 22.6%.
Home Care and Foods Profitability Gains
Home Care underlying sales +2.6% (volume-led +2.2%); Q4 growth accelerated to 4.7% with volumes +4.0%. Home Care underlying operating margin 14.9% (+40 bps). Foods delivered underlying sales +2.5% and a record underlying operating margin of 22.6% (+130 bps), underlying operating profit EUR 2.9bn.
Gross Margin and Overhead Improvement
Underlying operating margin expanded by 60 bps to 20.0% for the group. Gross margin up 20 bps to 46.9% (third consecutive year of gross margin expansion). Overheads reduced by 50 bps driven by productivity program.
Productivity Program Progress
Productivity program has delivered >EUR 670m of savings to date, ahead of schedule and on track for EUR 800m by 2026; overhead efficiencies contributing to margin expansion.
Cash Generation and Balance Sheet Strength
Free cash flow EUR 5.9bn (100% cash conversion); excluding demerger items free cash flow EUR 6.3bn. Net debt EUR 23.1bn, reduced by EUR 1.4bn year-on-year; net debt to underlying EBITDA ~2.0x.
Return on Invested Capital and Capital Returns
Underlying ROIC at 19% (top third of sector), benefited ~100 bps from Ice Cream demerger. Returned EUR 6.0bn to shareholders (EUR 4.5bn dividends, EUR 1.5bn buybacks) and announced new EUR 1.5bn buyback.
Portfolio Transformation and Strategic M&A
Rotated ~15% of the portfolio in 2025 (Ice Cream demerger + 10 transactions). Acquisitions like Minimalist, Wild and Dr. Squatch (and Magnum involvement) broaden exposure to premium, digitally-native and e-commerce-led brands.
Notable Brand Milestones and Innovation Traction
Liquid I.V. became a billion-dollar brand and achieved >18% U.S. household penetration; OLLY >$500m. Multiple brands delivered double-digit growth (Dove, Vaseline, Hellmann's flavored mayo becoming a EUR 100m platform). Brand & marketing investment increased to 16.1% of turnover (highest in over a decade).
Geographic Momentum — North America and Asia Pacific Africa
North America underlying sales +5.3% with volumes +3.8%. Asia Pacific & Africa underlying sales +4.6% with volumes +3.0%; Q4 APA accelerated to +6.9% (volumes +5.7%). Strong Indonesia recovery with Q4 growth of ~17%.
Guidance for 2026
Outlook: underlying sales growth expected at the bottom end of the 4–6% multiyear range, underlying volume growth of at least 2%, and a modest further improvement in underlying operating margin. Continued focus on volume-led growth and reinvestment into brands.
Negative Updates
Significant Currency Headwinds
Turnover fell to EUR 50.5bn, down 3.8% year-on-year, primarily driven by FX which reduced turnover by 5.9%. Currency hit underlying EPS by -8.8%; on a constant currency basis underlying EPS grew +9.5%.
Underlying Operating Profit and EPS Nearly Flat
Underlying operating profit declined 1.1% to EUR 10.1bn despite margin expansion. Underlying EPS rose only 0.7% to EUR 3.08 (currency drag offsetting operational gains).
Regional Weaknesses — Latin America and China
Latin America volumes declined -5.1% for the year with price +5.9% offsetting volumes; region faced macro and political uncertainty. China underlying sales flat for the year (improvement in H2 and mid-single-digit growth in Q4, but overall weakness persists).
Category and Execution Challenges
Hair Care was flat overall (pricing offset lower volumes); U.S. Hair and Deodorants in Brazil had performance gaps requiring corrective actions. Non-Power Brands (22% of revenue) had negative volume growth (~-1% for the year, -3% in Q4), partly due to discontinuations and portfolio pruning.
Free Cash Flow Impacted by Demerger Costs
Free cash flow was ~EUR 400m lower versus prior year due to Ice Cream demerger costs (including separation-related tax on disposals); excluding these items FCF would have been EUR 6.3bn.
Inflationary Pressures in Select Commodities
Company expects commodity inflation in 2026 concentrated in palm oil, canola oil and surfactants; also wage inflation and potential imported inflation from emerging market currency moves — requiring pricing and productivity offset.
Promotional Intensity and Channel Headwinds
Noted pickup in promotional activity (especially in Foods) and some channel/assortment issues (e.g., Liquid I.V. lost assortment share in a key club retailer; higher DTC customer acquisition costs for Nutrafol). Price/format mix issues in Brazil required corrective pricing and format adjustments.
Disposals and Portfolio Actions Dented Revenue Growth
Net impact from acquisitions and disposals was -1.2% (acquisitions +0.6%, disposals -1.8%), reflecting exits from several non-core businesses which reduced reported turnover despite improving long-term focus.
Company Guidance
Unilever guided 2026 underlying sales growth at the bottom end of its 4–6% multiyear range (c.4%), with underlying volume growth of at least 2% and a further modest improvement in underlying operating margin; management expects overall inflation to be lower than 2025 but selective commodity pressure (notably palm, canola and surfactants) and some currency headwinds. Capital allocation guidance included a new €1.5bn share buyback, continued sustained/growing dividends (maintaining a roughly 70:30 dividend:buyback balance), continued elevated brand & marketing investment (16.1% of turnover in 2025), CapEx at about 3.1% of turnover with >50% directed to productivity, and completion of the €800m productivity program in 2026 (c.€670m delivered to date, ~€130m remaining). Balance-sheet/ cash priorities were reiterated — having generated €5.9bn free cash flow in 2025 (100% cash conversion), with year‑end net debt €23.1bn and net debt/EBITDA ~2x — while the company reiterated its focus on volume-led growth, positive mix and gross‑margin expansion to drive hard‑currency EPS.Unilever Financial Statement Overview
Summary
Fundamentals are generally solid for a mature staples business, supported by resilient profitability and good free-cash-flow quality. The main offsets are the pronounced 2025 revenue contraction and a more leveraged balance sheet that reduces flexibility.Income Statement
Profitability remains solid, with net margin improving to ~12.1% in 2025 (vs. ~9.5% in 2024) and operating profitability holding near ~19–20%. However, the sharp 2025 revenue decline (-18.8% YoY) is a clear red flag versus the generally steadier top-line trend in prior years, creating uncertainty around the quality and durability of recent earnings despite stable margins.72
Positive
Balance Sheet
Leverage is meaningfully elevated, with debt running at ~1.9x equity in 2025 (up from ~1.5x in 2024), which reduces financial flexibility. Equity and total assets also stepped down in 2025, reinforcing balance-sheet pressure. Offsetting this, returns on equity were strong in 2021–2024 (~29–40%), indicating historically efficient profit generation, but the higher leverage profile keeps the risk profile moderate.54
Neutral
Cash Flow
Cash generation is a relative strength: free cash flow consistently tracks close to reported earnings (free cash flow at ~82% of net income in 2025; similar levels across prior years), suggesting good earnings quality. That said, free cash flow declined in 2025 (-5.5%) and cash conversion versus profits remains only moderate (operating cash flow running around ~29–44% of net income historically, ~35% in 2025), indicating some working-capital or cash timing drag.76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 50.50B | 60.76B | 59.60B | 60.07B | 52.44B |
| Gross Profit | 50.50B | 60.76B | 25.18B | 24.17B | 22.18B |
| EBITDA | 10.87B | 13.01B | 11.06B | 10.58B | 11.38B |
| Net Income | 5.86B | 5.74B | 6.49B | 7.64B | 6.05B |
Balance Sheet | |||||
| Total Assets | 70.44B | 79.75B | 75.27B | 77.82B | 75.09B |
| Cash, Cash Equivalents and Short-Term Investments | 5.06B | 7.63B | 6.11B | 5.52B | 4.50B |
| Total Debt | 29.59B | 30.66B | 28.59B | 28.44B | 29.67B |
| Total Liabilities | 52.86B | 57.20B | 54.50B | 56.12B | 55.35B |
| Stockholders Equity | 15.52B | 19.99B | 18.10B | 19.02B | 17.11B |
Cash Flow | |||||
| Free Cash Flow | 6.25B | 7.78B | 7.92B | 5.83B | 6.86B |
| Operating Cash Flow | 7.61B | 9.52B | 9.43B | 7.28B | 7.97B |
| Investing Cash Flow | -3.57B | -625.00M | -2.29B | 2.45B | -3.25B |
| Financing Cash Flow | -5.57B | -6.94B | -7.19B | -8.89B | -7.10B |
Unilever Technical Analysis
Positive
67.56
Price Trends
67.56
Positive
65.97
Positive
65.58
Positive
Market Momentum
2.00
Negative
69.99
Neutral
73.11
Neutral
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 67.56 is below the 20-day moving average (MA) of 71.36, below the 50-day MA of 67.56, and above the 200-day MA of 65.58, indicating a bullish trend. The MACD of 2.00 indicates Negative momentum. The RSI at 69.99 is Neutral, neither overbought nor oversold. The STOCH value of 73.11 is Neutral, 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $384.11B | 24.47 | 31.58% | 2.92% | 1.23% | 17.97% | |
69 Neutral | $161.14B | 23.48 | 32.63% | 3.74% | -0.30% | -14.60% | |
68 Neutral | $36.44B | 24.80 | 14.39% | 4.85% | -2.94% | 34.54% | |
65 Neutral | $78.64B | 36.94 | 1602.26% | 2.67% | -0.05% | 2.49% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $36.88B | 18.22 | 147.22% | 5.03% | -10.04% | -23.41% | |
55 Neutral | $41.70B | -230.44 | -4.34% | 1.30% | -6.36% | -554.84% |
* Consumer Defensive Sector Average
UL
Unilever
74.59
16.69
28.82%
CL
Colgate-Palmolive
98.11
8.04
8.93%
EL
The Estée Lauder Companies
115.29
41.81
56.90%
KMB
Kimberly Clark
111.11
-24.63
-18.14%
PG
Procter & Gamble
165.28
-2.76
-1.64%
KVUE
Kenvue, Inc.
19.01
-3.40
-15.16%
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.