On Thursday, Bernstein analysts at SocGen Group revised their rating on Unilever plc (LON:ULVR:LN) (NYSE: UL) stock from Market Perform to Outperform, significantly increasing the price target from £39.00 to £52.00. The upgrade was prompted by positive signs of a turnaround for the company, as indicated by recent scanner data.
The analysts cited Unilever's improved category growth exposure, partly due to portfolio changes and also attributed to the company's strong innovation efforts. With a market capitalization of $138.5 billion, Unilever stands as a prominent player in the Personal Care Products industry, according to InvestingPro data.Want deeper insights? InvestingPro subscribers have access to 8 additional key tips and comprehensive financial analysis for Unilever.
The analysts expressed confidence in Unilever's potential for long-term organic growth, estimating a 5% rate. Their forecasts for the company's financial performance are approximately 3% higher than the consensus for the fiscal year 2025 and 5% higher for 2026. They believe the market has yet to fully recognize Unilever's growth potential. The company maintains strong financial health with an impressive profit score of 4.29 out of 5 and trades at a P/E ratio of 21.5x.
In addition to the upgrade and new price target for Unilever's London listing, Bernstein analysts also set a new target price of €62.80 for the company's UNA listing. This new target is based on an increased EV/EBITDA multiple of 11.4x, up from the previous 10.8x, applied to a raised forward next twelve months plus one (NTM+1) EBITDA estimate of €13,716.
The analysts' optimistic outlook for Unilever is supported by the company's recent performance and strategic initiatives that appear to be driving acceleration in category growth. They emphasized that the relevance of Unilever's product categories is a direct result of the company's proactive measures, rather than external factors.
This rating upgrade and price target raise by Bernstein analysts reflect a significant endorsement of Unilever's strategic direction and its ability to achieve sustained growth in the coming years. The new targets suggest that Unilever's shares have room to grow, as the company continues to execute its business plan and deliver on its innovation strategy.
Notably, the company has maintained dividend payments for 33 consecutive years, demonstrating consistent shareholder returns.Discover more detailed analysis and valuation metrics with InvestingPro's comprehensive research report, part of our coverage of 1,400+ top stocks.
In other recent news, Unilever is facing a challenging outlook according to RBC Capital Markets, which recently downgraded the company's stock rating to "Underperform" due to concerns about its growth targets. Despite these challenges, Unilever reported a 4.5% increase in underlying sales in the third quarter, primarily driven by volume increases. This growth is part of the company's ongoing implementation of its Growth Action (WA:ACT) Plan 2030, which focuses on market-making brands.
Unilever is also planning to separate its Ice Cream division by the end of 2025, a development closely watched by investors. TD Cowen, however, has revised its price target for Unilever downwards to $70.00 but maintains a Buy rating.
The company's strategic initiatives, aimed at bolstering performance in key markets and refining its innovation process, were highlighted as potential drivers for a multi-year turnaround.
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