Unilever stock downgraded by RBC over growth concerns, doubts about reaching volume targets

From Investing.com: 2025-01-06 04:37:18

Shares of Unilever Plc fell after RBC Capital Markets downgraded the stock due to concerns about sustaining recent growth. Unilever outperformed the MSCI European Consumer Staples Index in 2024. Analysts doubt Unilever can achieve 2% volume growth target. Unilever lacks market leadership in key categories post-ice cream business divestment.

RBC notes Unilever’s volume growth struggles since 2014, questions feasibility of 2% growth goal. Currency depreciation in emerging markets offsets volume growth. Unilever’s capital expenditure levels are lower than competitors. Analysts believe Unilever needs to increase capex to reach volume growth target. Restructuring costs impact earnings quality.

Unilever’s focus on “Power Brands” and key markets is praised, but concern raised about neglect of other brands and markets. RBC lowers price target for Unilever to GBp 4,000 from GBp 4,800. Limited upside seen for stock due to stretched valuation compared to historical averages and peers like Nestlé.



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