Unilever shares slumped Tuesday as Morgan Stanley cut its rating on the Hellmann’s mayonnaise maker to the equivalent of sell.
Morgan Stanley lowered its rating on Unilever to underweight from equal-weight and cut its price target to $48 from $52, or 3775 pence from 4100 pence.
Unilever’s London-listed stock
ULVR,
UL,
fell 2% to 3920 pence
Analysts led by Sarah Simon said Unilever now trades at a small premium to other staples stocks.
But they said Unilever will struggle to hit the high end of its 3% to 5% organic sales growth target, and it has a higher exposure to emerging markets. Morgan Stanley said in India and Indonesia in particular Unilever is seeing tougher trading conditions.
In the note, they also point to Unilever’s exposure to ice cream, which they say is a particular casualty of the GLP-1 weight-loss drugs.
The analysts say they prefer GSK spinoff Haleon
HLN,
for exposure to consumer health and L’Oreal for its pure-play exposure to global beauty.
L’Oreal
OR,
separately was upgraded to buy from hold at Berenberg, which forecasts 6.7% organic sales growth from 2025 to 2030, the highest of household and personal care stocks it covers.
Broader European markets were listless in midday trade on Tuesday, with the German DAX
DX:DAX
rising 0.4% while the FTSE 100
UK:UKX
slipped 0.1%.
This post was originally published on Market Watch
