Unilever Reports Strong FY 2023 Results with Strategic Buyback
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5h ago
0mins
Should l Buy UL?
Source: seekingalpha
- Financial Performance: Unilever reported a FY 2023 non-GAAP EPS of €3.08, with turnover at €50.5 billion reflecting a 3.8% year-over-year decline, yet demonstrating stable profitability amid market fluctuations.
- Sales Growth: The company achieved a 3.5% underlying sales growth, with a 1.5% volume increase, indicating its ability to maintain market share in a competitive environment and reflecting the ongoing appeal of its products.
- Margin Expansion: Underlying operating margin expanded to 20.0%, up 60 basis points from the previous year, showcasing the company's success in cost control and operational efficiency, thereby enhancing future profitability sustainability.
- Share Buyback: Unilever announced a €1.5 billion share buyback plan aimed at enhancing shareholder value and boosting market confidence, while projecting 2026 underlying sales growth to remain within the 4% to 6% guidance range despite anticipated market slowdowns.
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Analyst Views on UL
Wall Street analysts forecast UL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for UL is 68.37 USD with a low forecast of 60.10 USD and a high forecast of 74.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 71.970
Low
60.10
Averages
68.37
High
74.00
Current: 71.970
Low
60.10
Averages
68.37
High
74.00
About UL
Unilever PLC is a United Kingdom-based global consumer goods business. The Company's segments include Beauty & Wellbeing, Personal Care, Home Care and Foods. The Beauty & Wellbeing segment primarily sells hair care (shampoo, conditioner, styling), skin care (face, hand and body moisturizers) and includes Prestige Beauty and Wellbeing. The Personal Care segment primarily sells skin cleansing (soap, shower), deodorant and oral care (toothpaste, toothbrush, mouthwash) products. The Home Care segment primarily sells fabric care (washing powders and liquids, rinse conditioners) and a range of home and hygiene cleaning products. The Foods segment primarily sells cooking aids and mini-meals (soups, bouillons, seasonings), condiments (mayonnaise, ketchup) and Unilever Food Solutions. The Company's beauty & wellbeing brands include CLEAR, Dermalogica, Liquid I.V., Dove and TRESemme. The Company's home care brands include Cif, Comfort, Domestos, OMO, Radiant, Sunlight and Surf.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Unilever Reports Strong FY 2023 Results with Strategic Buyback
- Financial Performance: Unilever reported a FY 2023 non-GAAP EPS of €3.08, with turnover at €50.5 billion reflecting a 3.8% year-over-year decline, yet demonstrating stable profitability amid market fluctuations.
- Sales Growth: The company achieved a 3.5% underlying sales growth, with a 1.5% volume increase, indicating its ability to maintain market share in a competitive environment and reflecting the ongoing appeal of its products.
- Margin Expansion: Underlying operating margin expanded to 20.0%, up 60 basis points from the previous year, showcasing the company's success in cost control and operational efficiency, thereby enhancing future profitability sustainability.
- Share Buyback: Unilever announced a €1.5 billion share buyback plan aimed at enhancing shareholder value and boosting market confidence, while projecting 2026 underlying sales growth to remain within the 4% to 6% guidance range despite anticipated market slowdowns.
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- Sales Growth: The company achieved a 3.5% underlying sales growth, with a 1.5% volume increase, indicating its ability to maintain market share in a competitive environment and reflecting the ongoing appeal of its products.
- Margin Expansion: Underlying operating margin expanded to 20.0%, up 60 basis points from the previous year, showcasing the company's success in cost control and operational efficiency, thereby enhancing future profitability sustainability.
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- Funding Scale and Valuation: The IPO was priced at $18 per share, with approximately 11 million shares sold, raising $197.9 million and valuing the company at $724 million, showcasing investor confidence in the organic children's nutrition market.
- Sales Growth and Financial Status: In 2024, Once Upon a Farm reported net sales of $156.8 million, a 66% increase year-over-year, although losses widened from $17.6 million to $23.8 million, still reflecting robust market demand and growth potential.
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- Favorable Market Trends: Amidst a consumer and policy pushback against ultra-processed foods, Once Upon a Farm recorded net sales of $156.8 million in 2024, a 66% increase from the previous year, despite widening losses to $23.8 million, showcasing strong growth potential.
- Clear Strategic Goals: As a public benefit corporation, Once Upon a Farm aims to drive systemic change in childhood nutrition, planning to use IPO proceeds to pay down debt, purchase new equipment, and fund general corporate purposes, demonstrating its commitment to long-term growth.
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- Experience Economy Growth: The company's experiences division, which includes theme parks, resorts, and cruises, achieved quarterly revenue of $10 billion for the first time, indicating strong consumer demand for entertainment experiences that drive overall performance.
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