Unilever PLC (UL) Stock Forecasts: A Deep Dive into the Company's Prospects

Unilever PLC (UL), the world's largest packaged food company, has been a staple in many investors' portfolios due to its consistent growth and strong dividend history. As the company prepares to spin off its ice cream division in 2025, investors are eager to understand the potential impact on Unilever's stock price. This article will delve into the key financial metrics, analyst opinions, and recent developments that could influence Unilever PLC's (UL) stock forecasts.



Key Financial Metrics

Unilever is forecast to grow earnings and revenue by 11.1% and 3.5% per annum, respectively, with EPS expected to grow by 10.6% per annum. The company's return on equity is forecast to be 38.9% in 3 years. These growth projections indicate that Unilever is well-positioned to maintain its historical performance and continue to grow in the future.



Analyst Opinions

Over half of the 23 analysts covering Unilever (LSE:ULVR) think investors should buy the stock at the current share price. However, the company's plan to divest its ice cream business in 2025 creates uncertainty, which may deter some investors from buying the stock right now.



The Big Risk: Ice Cream Divestment

The main unknown with Unilever at the moment is what the company will be able to get by selling its ice cream business. During the first nine months of 2024, the unit brought in around 15% of total revenues, so the company needs to realize a decent price by selling the business. However, there are no guarantees.



Unilever's best outcome would be to find a buyer that can incorporate its brands into an existing infrastructure. However, the intention to sell is well-known, which isn't usually conducive to attracting high prices. Earlier this year, the Financial Times reported that Unilever is looking to launch the unit as a standalone business. This could present an opportunity for investors in 2025, as stocks that come onto the market through divestitures often trade lower initially before climbing higher.



Risks and Rewards

Uncertainty over the outcome of Unilever's plan to divest the business makes it hard to work out what the Unilever share price should be. However, investors should keep a close eye on the company as it moves forward with its divestment plans. With where the stock is right now, it's likely that investors will be more interested in the new company than the existing one. However, Unilever's strong financial performance and growth prospects could make it an attractive investment option as well.



In conclusion, Unilever PLC (UL) stock forecasts are influenced by the company's strong financial performance, analyst opinions, and the potential impact of the ice cream divestment. While the divestment creates uncertainty, it also presents an opportunity for investors to capitalize on the new company's growth prospects. As the company moves forward with its plans, investors should closely monitor Unilever's progress and consider the potential risks and rewards of investing in the company's stock.