Shares in Unilever PLC (LSE:ULVR) fell 1.8% after Morgan Stanley (NYSE:MS) downgraded stock in the maker of Marmite and Dove soap, citing a slew of headwinds.
Adjusting the price target from 4,100p to 3,775p, the American investment bank moved its recommendation to 'underweight' from 'equal-weight'.
In doing so it referenced concerns over cash conversion and emerging market (EM) exposure. It also highlighted Unilever's struggles with achieving high-end growth targets, complexities in portfolio restructuring, and the challenge of maintaining its competitive advantage in various consumer goods categories.
Despite management's focus on innovation and marketing to drive growth, increased competition, especially in EMs, and the fading impact of previous innovations may hinder progress, Morgan Stanley said.
It also had a cautious outlook on earnings, influenced by foreign exchange impacts and competitive pressures, particularly in Europe and EMs.
At 12.23 pm, the shares were changing hands for 3,923p, down 73p.