As everyone might have heard Unilever has warned of slower sales and an earning report miss or 3-5%.
Will this earning report be enough to break Unilever’s strong trend. The warning has caused the stock to drop 7%, whilst another competitor P&G is still climbing. What are everyone’s thoughts?
Unilever’s part of a defensive tilt in my high-yield portfolio. I’m not overly concerned about the latest news because it had been looking pretty expensive anyway over the past year. I’ve been waiting for a dip so I can buy more.
I’m no expert so I wouldn’t like to say, it’s certainly a dip though. I imagine we’ll find out if it’s a blip or due to more deep-seated problems when the full earnings report is published at the end of January.
I believe the drop is due to - Expected cost increases hurting margins. I believe they said in the past that the would be able to increase prices to offset this, but they guided recently this may not be achievable.
I’m this video I analyse Unilever’s stock using fundamental analysis. Is ULVR stock a buy?
I go through Unilever’s business summary & sales breakdown to get an understanding of the business. After this, I go through my analysis checklist and then value Unilever stock using the discounted free cashflow method.
Unilever plc is a British multinational consumer goods company headquartered in London, England. Unilever products include food, condiments, ice cream, wellbeing vitamins, minerals and supplements, tea, coffee, breakfast cereal, cleaning agents, water and air purifiers, pet food, toothpaste, beauty products, and personal care. Unilever is the largest producer of soap in the world and their products are available in around 190 countries.
Unilever’s revenue has been stagnant/decreasing for a number of years now, which is clearly not a good sign. However UL/ULVR is a fairly profitable business with net margins consistently above 10%. Unilever have consistently high Return on Equity (which is fantastic), but the main concern for me is the huge debt load on the Balance Sheet.
As legendary investor & Co-CEO of Markel, Tom Gaynor, says “Leverage introduces a degree of fragility to the business that concerns me”
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