Editor's Note: This analysis was originally published as a stock note by Morningstar Equity Research.
Key Morningstar Metrics for Unilever
- Fair Value Estimate: GBX 4750
- Morningstar Rating: ★★★
- Morningstar Economic Moat Rating: Wide
- Morningstar Uncertainty Rating: Low
Unilever Confirms Full-Year Guidance
Unilever ULVR reported first-quarter 2025 underlying sales growth of 3%, slightly ahead of company-compiled consensus’ 2.8%, driven by pricing. The company confirmed full-year 2025 guidance. Shares were broadly flat at the market open on April 24.
Why it matters: Like other European consumer staples peers that reported first-quarter sales, volume growth was weaker than expected, rising just 1.3% versus company-compiled consensus’ 1.5% and below Unilever’s midterm ambition of more than 2%.
- Developed markets posted solid organic sales growth of 4.5% compared with 2% in emerging markets. This was supported by mid-single-digit organic growth across beauty and well-being, personal care, and ice cream, with improving competitiveness in Europe and North America.
- Management expects organic sales growth to accelerate as the year progresses, underpinned by a robust innovation plan and stepped-up brand and marketing investments, expected to reach 15%-16% of sales. China and Indonesia, which have been underperforming recently, are expected to contribute more meaningfully to growth in the second half with improved execution.
The bottom line: We don’t expect to materially change our fair value estimate for wide-moat Unilever. At current levels, shares are fairly valued.
- The stock is up 2% year to date with some volatility driven by a fourth-quarter 2024 consensus miss, the abrupt departure of CEO Hein Schumacher, and tariff-related uncertainty. Unilever’s portfolio diversification across categories and geographies positions it well to adapt to a shifting macroeconomic backdrop, with limited direct tariff exposure due to its localized manufacturing footprint.
- Still, Unilever is not immune to indirect effects from tariffs, particularly on currencies, commodities, and consumer sentiment. This could lead to some changes to its short-term plans as the largest growth opportunities may shift in the face of pronounced consumer weakness.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.