Unilever Stock is Fully Priced

Unilever is a high quality stock but the firm is going through a period of slightly subpar performance, with sluggish growth raising questions about pricing power

Philip Gorham 26 January, 2017 | 3:55PM

Unilever's (ULVR) full-year decline in sales of 1% was a whisker below our assumption of a 0.6% decline, but margins were in line with our forecast.

This is a high-quality business with a wide economic moat

Unilever is going through a period of slightly subpar performance, with sluggish organic volume growth raising questions about Unilever's pricing power, but the company retains a firmly entrenched position with retailers, and we still believe this is a high-quality business with a wide economic moat. Nevertheless, with the stock trading at our fair value estimate, at 19 times 2017 earnings, we see limited upside to the shares and recommend waiting for a wider margin of safety.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Unilever PLC4,318.00 GBX-2.33

About Author

Philip Gorham  

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