Challenges Remain at Unilever but Shares Offer Value

Although Unilever finished the year off in fairly strong fashion, equity analysts expect next year to be more challenging thanks to macro issues in Europe and emerging markets

Philip Gorham 19 January, 2016 | 12:37PM

There were few surprises in Unilever's (ULVR) 2015 full-year results, with underlying earnings per share of €1.82, core revenue growth of 4.1% and an adjusted EBIT margin of 14.8%, all of which were in line with our forecasts. Conditions remain challenging, and we expect a slowdown in reported results next year, but for long-term investors willing to look past near-term volatility, we think there is modest upside to this high-quality business.

The emerging-markets slowdown is likely to affect Unilever more than most

The robust performance evident in these results highlights the entrenched position enjoyed by Unilever in its customers' supply chains, and we reiterate our wide economic moat rating. We may increase our fair value estimate slightly, but only to account for the time value of money, as cash flows track in line with our forecasts.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Unilever PLC4,306.00 GBX0.54

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Philip Gorham  

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