Unilever has outperformed its consumer goods sector by 15% recently, but there is still more to go believes Citigroup.
There is scope for relative consensus earnings upgrade in the short-term and longer-term re-rating potential, in a sector lacking other ‘clean’ turnaround stories or relatively cheap growth compounders.
“We think the market still underestimates the duration of 1) the gross margin rebuild, 2) the relative volume/earnings upgrades, 3) the Beauty & personal care growth algo change as the group benefits from a new category matrix organization.”