Jefferies says World Cup and stockpiling flattered Unilever’s standout quarter Proactive uses images sourced from Shutterstock
Jefferies has raised its price target for Unilever PLC (LSE:ULVR) to 3,900p from 3,800p while sticking with an underperform rating, arguing that the consumer goods group’s headline second-quarter volume growth was inflated by roughly 2 percentage points of one-off factors.
David Hayes calculated the boost was worth around €256 million of sales in the quarter.
Volume and mix growth at the core business, covering home and personal care alongside retained foods, came in at about 7.4%, beating consensus by 4.4 percentage points.
Hayes identified three distortions behind that number.
Unilever’s sponsorship of the North American World Cup, where it was the sole personal care partner, added an estimated 3 percentage points to that division through merchandising and promotional discounting.
Home care saw a similar 3-point boost from retailers buying ahead of price rises the company is taking in the second half as oil-linked input costs climb.
The timing of Amazon Prime Day shifting into the quarter added around €30 million, benefiting the beauty and wellbeing arm.
Unilever has played down the pre-buying and World Cup effects, but Hayes said peer precedent, particularly at Procter & Gamble, made such dynamics inevitable.
Stripping them out leaves volume and mix at 5.4%, a two-year compound growth rate of about 3%.
The analyst raised his full-year like-for-like sales forecast by 40 basis points to 4.4%, now within the company’s 4% to 6% guidance range rather than at the bottom of it.
Earnings forecasts for 2027 rise 2%, helped by currency turning into a modest tailwind.
The target price implies a multiple of 13.5 times forecast earnings, against roughly 16.5 times on consensus numbers today.
Hayes sees risk to the operating margin holding above 20% if volume growth slips below 2%, with about €300 million of stranded costs from the ice cream exit still to absorb.
The shares fell 20p to 4,570.5p.