Unilever share price down as group flags growth at lower end of range

Shares in Unilever (LON:ULVR) have fallen deep into the red in London this morning as the consumer goods giant warned that sales growth this year was likely to be at the lower end of its multi-year guidance. The company, which last year scrapped plans to abandon its London headquarters, further warned that market conditions were likely to remain challenging.

As of 10:38 GMT, Unilever’s share price had given up 3.12 percent to 3,938.50p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.52 percent higher at 6,977.51 points.

Unilever posts FY results

Unilever announced in a statement this morning that its underlying sales growth was 2.9 percent last year. Underlying sales growth excluding spreads meanwhile was 3.1 percent with 2.1 percent volume and one percent price. The group’s GAAP turnover, however, dipped 5.1 percent to €51 billion during the reported period.

“In 2019 we expect market conditions to remain challenging,” Unilever’s CEO Alan Jope commented in the statement, adding that the company anticipated that “underlying sales growth will be in the lower half of our multi-year 3-5 percent range”.

Analysts weigh in on update

“Unilever isn’t a cheap stock by any stretch of the imagination, though what underpins that price tag is the company’s ability to churn out consistent growth,” said Laith Khalaf, senior analyst at Hargreaves Lansdown commented, as quoted by Proactive Investors, adding that similarly, a dividend yield of just over three percent also looked “a bit limp when compared to the wider UK stock market, but that’s because it’s expected to grow by 18 percent in the next two years, and the market puts a premium on that sort of rising income stream, particularly when it’s comfortably covered by cash flows”.

As of 10:55 GMT, Thursday, 31 January, Unilever plc share price is 3,938.50p.