Jefferies has reiterated an 'underperform' rating for Unilever Plc ahead of the consumer products group's fourth-quarter results amid "persistent concerns" surrounding the business.
Following the recent spin-off of its ice cream division into a newly listed Magnum Ice Cream Company, which houses brands like Magnum, Ben & Jerry's Wall's and Cornetto, Jefferies has updated its numbers for Unilever.
"We continue to see downside risk to both the valuation ([next 12 months] P/E from c17x to 15x), with earnings growth contained by pricing/operating margin pressures," according to analyst David Hayes.
Fourth-quarter results from the company on 12 February should see volume-mix improvements near 2%, with the full-year like-for-like sales growth rate somewhere between 4% and 6%, Jefferies said.
"But noise on FY26 operating margin dynamics and risk of US growth contribution slowing threatens sentiment we think in 1H26," Hayes added.
The broker has raised its target price for Unilever from 4,000p to 4,100p but kept a negative view on the shares, which were down 1% at 4,696p by 1230 GMT.