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Unilever upgraded to ‘equal weight’ as Barclays says coronavirus pandemic “dramatically changes” investment case

The bank said Unilever's gearing towards homecare products was currently “a key asset” and that parts of its food and personal care portfolio “should benefit from stock-piling”

Unilever PLC - Unilever upgraded to ‘equal weight’ as Barclays says coronavirus pandemic “dramatically changes” investment case

Unilever PLC (LON:ULVR) has been upgraded to ‘equal weight’ from ‘underweight’ by analysts at Barclays, who said the coronavirus pandemic “dramatically changes” the investment case for the consumer goods giant.

“Our biggest concern was that we felt its portfolio was too mass market and not well positioned to take advantage of strong growth channels of travel retail and Chinese prestige cosmetics. Whilst we still harbour some of our fundamental concerns, [coronavirus] dramatically changes the investment case. Travel retail is effectively closed and Prestige cosmetic growth has slowed dramatically”, the bank said in a note on Thursday.

READ: Unilever donates €100mln in soap and sanitisers for coronavirus battle

With this in mind, Barclays said Unilever’s gearing towards homecare products was currently “a key asset” and that a recent partnership with the UK government to promote handwashing in emerging markets “should drive sales”.

Analysts added that parts of the firm’s food and personal care portfolio “should benefit from stock-piling”.

“Whilst we appreciate most of the food growth will be pantry loading, more importantly we believe that sanitation/handwashing/laundry will see net consumption gains”, the bank said, maintaining its target price at 5,000p.

In lunchtime trading, Unilever shares were flat at 3,991p.

Quick facts: Unilever PLC

Price: 4332 GBX

LSE:ULVR
Market: LSE
Market Cap: £113.36 billion
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