Consumer goods giant Unilever PLC (LSE:ULVR), owner of everything from Bovril to Vaseline, risks falling short of its third-quarter sales growth expectations, Jefferies analysts have warned.
The investment bank forecasts organic sales growth of 3.3%, which is below the broader market consensus, due to a “negligible” contribution from product pricing.
In fact, pricing could display a negative contribution to sales as Unilever attempts to “restore competitiveness in core areas”.
Unilever is exposed to a slowdown in US consumer spending and disinflation, rather than deflating input costs, added Jefferies.
Given Unilever’s 25%-plus year-to-date share price rally and 19 times forward price to earnings, Jefferies sees shares paring back their gains in the year ahead.
The stock was given an 'underperform' rating with a 4,100p price target against a 4,894p publication price.
Third-quarter results are due on 24 October.