Analysts said Unilever PLC (LSE:ULVR) results showed encouraging signs in most areas, as the shares rose to a seven-month high.
In short, first-quarter numbers beat market expectations but 2024 outlook was left unchanged, for underlying sales growth of 3-5% and a modest improvement in underlying operating margin.
"Whilst pricing may slow, we expect this to be positive at the group level over the course of the year," said Deutsche Bank.
"We also expect the company to confirm the previous view that volume growth will improve over the course of the year."
The shares improved over 5%, almost hitting £51, which had not been broken since September.
Deutsche said the FTSE 100 group is "showing improving performance and this before the turnaround really builds up a significant head of steam".
On top of this, the German bank noted that the Marmite and Magmum maker has "historically always performed well with a 6-9m lag to the USDEUR and we expect it to again".
Barclays was even more glowing, saying Unilever is "making decisive steps to become a higher growth higher margin company and whilst early stages, our conviction continues to increase that this is the most compelling turnaround story in European consumer staples".
Analysts at the investment banking arm of the UK lender added that they had been "surprised the stock has been so weak relative to the sector in the last month" with some analysts expecting a sales shocker.
As a reminder P&G's sales growth this quarter was 3% with flat volumes, so Barclays noted that Unilever "leads the pack of its nearest peers" for the first quarter.
"Our point continues to be that the market is underestimating the growth and margin potential of its Prestige Beauty unit which this quarter powered 5.6% volume growth in its bigger Health and Wellbeing.
Barclays said the comment in the statement from the CEO which really stands out is “Unilever’s transformation is at an early stage, but we have increasing confidence in our ability to deliver sustained volume growth and positive mix as we accelerate gross margin expansion".
Compared to the last close price at 3,863p, Deutsche has a share price target of 4,600p and a 'buy' rating, and Barclays has the same target, although it has a 'neutral' stance.