Unilever Shows Resilience as Analysts Back Long-Term Strength
Unilever is drawing renewed confidence from analysts who argue short-term challenges shouldn’t overshadow the consumer goods giant’s long-term potential. Analysts at Jefferies and Deutsche Bank remain upbeat about the company’s trajectory despite recent underperformance in areas like ice cream sales and cleaning products.
Shares in Unilever have struggled to keep pace with sector peers, with weaker-than-expected performance in several categories contributing to investor caution. However, Jefferies believes these “bumps in the road” are transitional. The investment bank reiterated its ‘Buy’ rating and £46.00 price target, pointing to strong fundamentals and improving execution under CEO Hein Schumacher’s leadership.
One core focus is on portfolio simplification and category performance. Unilever recently announced the spin-off of its global ice cream business as a strategic move to streamline operations. The division, home to brands like Magnum and Ben & Jerry’s, has seen growth stagnate compared to other units. The proposed separation aims to sharpen focus on high-growth, high-margin categories such as beauty, personal care, and health & wellbeing.
The initiative is one of several moves under Schumacher’s ‘Growth Action Plan’, designed to drive faster innovation cycles, stronger brand-building, and improved supply chain efficiency. Deutsche Bank estimates the restructuring could boost core business performance and result in healthier profit margins over time. It maintains a ‘Buy’ rating and projects a share price target of £45.00.
Despite recent softness in developed markets like Europe, where household volumes remain under pressure, emerging markets are supporting broader growth. Unilever’s strong presence in high-growth regions such as India, Southeast Asia, and parts of Africa continues to be a key asset, especially as demand rebounds post-pandemic.
With consumer behavior continuing to shift toward health-conscious and sustainable products, Unilever’s emphasis on environmental, social, and governance (ESG) standards is also seen as a long-term advantage. Its leadership in ESG metrics is a differentiating factor that aligns with evolving shopper preferences and retailer expectations.
While short-term execution risks remain, particularly in resolving complexity across its portfolio, analysts assert that Unilever is positioning itself for long-term value creation. Its plan to exit lower-performing categories while doubling down on core strengths could place the company on firmer ground in a competitive FMCG landscape.