Q1 Results To Give Unilever The Dutch Courage To Climb Higher?
Spreadex | Apr 13, 2018 10:52
Though it couldn’t quite end the year at its £45-crossing October all-time peak, 2017 was still pretty exceptional for Unilever. The consumer goods behemoth ended up climbing 25% across the 12 months, closing out December at £41.29 having opened January just above £33.
Yet, as mentioned, Unilever had begun to lose momentum in the final quarter of 2017, a trend that has continued into 2018. By March the stock found itself repeatedly testing a £37 support level, its worst price in 13 months. It has been helped out since then, however, with a ‘Buy’ rating from UBS briefly sending the stock above £40. Unilever PLC now sits at a current trading price of £39.12.
The firm released its full year results at the start of February, posting a 2.2% increase in turnover excluding its now-sold spreads business to €50.7 billion, while underlying sales growth sans spreads was up to a post-Kraft Heinz (NASDAQ:KHC) bid target of 3.5%. Things actually accelerated in the fourth quarter, with underlying sales growth excluding spreads jumping 4.3%. Unilever also revealed a 110 basis points rise in its annual underlying operating margin to 17.5% alongside a 9% surge in pre-tax profit to €8.1 billion.
In terms of its Q1 figures next Thursday, analysts are expecting a 3.6% drop in turnover to €12.8 billion, but with a 3.4% increase in underlying sales growth, rising to 3.6% when the spreads division is removed from the equation. Investors may also want to hear an update on Unilever’s plans to shift its base to Rotterdam, a move that would likely leave it ineligible to be part of the FTSE 100.
Unilever PLC (LON:ULVR) has a consensus rating of ‘Hold’ alongside an average target price of £43.72.
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