Unilever’s Underlying Performance on Track in Q2 Amid Severe Inflation

Unilever’s first-half operating income of just over EUR 4.5 billion was right in line with our forecasts, and we maintain our EUR 50 fair value estimate for the Amsterdam-traded shares. So far, we think Unilever is navigating the challenges of inflation fairly well, and consumers appear to be absorbing higher prices, but significant risks remain for manufacturing and distribution costs in the second half of the year. Although Unilever’s market value has recovered from its recent lows, there remains upside to our valuation of the wide-moat business.