Unilever’s Q1 Could Have Been a Lot Worse As Consumers Absorb Cost Inflation

Unilever reported respectable first-quarter sales that could have been a lot worse given the multitude of challenges it currently faces, and we think shareholders will take comfort from the robustness of consumer demand in the face of steep price increases. We have tweaked our assumptions slightly, but retain our wide moat rating and EUR 50 fair value estimate. Although Unilever operates in some highly competitive categories in which the consumer has historically been relatively price sensitive, the expectations being priced into the stock are currently very low, and we think the current market valuation offers an attractive risk/reward proposition.