UBS has cut its price target for Unilever PLC (LSE:ULVR), the consumer goods group, to 4,390p from 4,440p after reducing its 2026 earnings forecast by 1%.
The bank retained its 12-month ‘sell’ rating, while Unilever’s shares were priced at 4,542p in the research note dated 6 October.
UBS expects Unilever to deliver 5% underlying sales growth in the third quarter, ahead of Visible Alpha consensus at 4.46% but below the 5.8% achieved in the second quarter.
Volume growth is forecast at 3.2%, down from 5.5% in the previous quarter, with favourable comparisons in Latin America and India supporting the quarterly performance.
The pricing contribution is expected to rise to 1.7% from 0.2% in the second quarter as Unilever introduces price increases across its Home Care and Personal Care categories.
UBS forecasts third-quarter underlying sales growth above 5.5% across Beauty & Wellbeing, Personal Care and Home Care, with emerging markets continuing to outperform developed regions.
The bank expects Unilever to reaffirm its 2026 guidance for 4% to 6% underlying sales growth, including around 3% volume growth and price-led growth of 4% to 5% during the second half.
However, UBS expects tougher comparisons from the fourth quarter, alongside rising commodity costs, to push volume growth back below 2%.
The focus is then expected to shift towards Unilever’s capital markets day in New York on 4 November, where UBS sees scope for a new productivity programme and a medium-term operating-margin ambition of 21% to 23%.
The earnings revision mainly reflects higher finance expenses, with UBS lowering 2026 earnings per share to €3.22 while leaving its underlying operating-margin forecast unchanged at 20.1%.
Source: uk.finance.yahoo.com
