7th July 2014
Analysts at retail stockbroker The Share Centre are going against the market consensus ‘hold’ recommendation and tipping Unilever as a ‘buy’ for investors looking to build a position in a quality multinational.
The Fast Moving Consumer Goods, or FMCG FTSE 100 listed business, which counts the likes of P&G Tips, Flora and Walls among its plethora of brands has witnessed its shares slip 3% over the past year.
But recently Unilever’s management has been making efforts to turn the business around and has demonstrated its efforts are gaining traction says The Share Centre’s investment research analyst Sheridan Admans – notably investors have warmed up, with the stock up 9% over the past six months.
The firm’s first quarter results best estimates on revenue growth as it continues its drive to cut costs and invest in brands, while underlying sales growth was up 3.6% with emerging markets ahead by 6.6%.
But whilst growth slowed in emerging markets and currency weakness affected consumer demand in a number of emerging economies, the company is seeing tentative signs of stabilisation in its European operations.
Admans says: “Unilever looks attractive for investors over the longer term as it endeavours to recover costs, expand into emerging markets and innovate on a number of already established products. The company aims to improve supply chains and focus on profitable volume growth, together with improvement to cash flow, a strategy that has been paying dividends. Investors will be pleased to hear it continues to deliver strong returns on capital employed in the business and grow its dividend.
“We recommend investors ‘buy’ the stock but drip feed on any dips in the share price. We believe the stock has attractions investors wanting to build a long-term position in a quality global provider of home care and personal products.”