Unilever's Strong Performance and Growth Prospects Warrant Buy Rating

Unilever's strong performance in developed and emerging markets, driven by successful product launches and market share gains, has justified a Buy rating from TD Cowen analyst Robert Moskow. The company reported 3.8% organic growth and earnings per share of €1.59 in Q2, surpassing expectations. Unilever's operational improvements in key emerging markets and guidance for further margin expansion in FY25 also support a positive outlook.

Unilever's latest financial results for the second quarter of 2025 have been met with optimism by analysts, including TD Cowen's Robert Moskow, who has given the company a Buy rating. The company reported an impressive 3.8% organic growth in Q2, significantly outperforming market expectations. This growth was driven by robust sales in both developed and emerging markets, as well as successful product launches and market share gains.

Unilever's CEO, Fernando Fernandez, highlighted the company's strong performance in developed markets and the positive impact of decisive interventions in emerging markets. The company's underlying sales growth for the first half of 2025 was 3.4%, with a significant contribution from volume and price growth across all business groups. This growth was particularly notable in the second quarter, where sales increased by 3.8%, with volume growth of 1.8% and price growth of 2.0%.

Key drivers of Unilever's performance include the strong performance of its power brands, which contributed over 75% of turnover and grew by 3.8% in the first half. The Beauty & Wellbeing segment also showed resilience, with underlying sales growth of 3.7%, led by the continued strong performance of the Wellbeing business. Personal Care grew by 4.8%, with high-single-digit growth for Dove, and Home Care saw underlying sales increase by 1.3%, led by strong momentum in Europe.

Emerging markets, which accounted for 56% of Unilever's turnover, grew by 2.8% in the first half, with notable improvements in India and Indonesia. India's underlying sales grew by 5% in the second quarter, while China and Indonesia saw sequential improvements in the second quarter, with expectations for further acceleration in the second half.

Unilever's operational improvements and guidance for further margin expansion in fiscal year 2025 also support a positive outlook. The company expects underlying sales growth to be within the range of 3% to 5% for the full year, with second half growth ahead of the first half despite subdued market conditions. This expectation is driven by the continued strength in developed markets and improving performance in emerging markets, notably in India, Indonesia, and China.

Unilever's productivity program, launched in 2024, remains ahead of plan, with savings of €650 million expected by the end of 2025. The company also continues to undertake targeted acquisitions to enhance focus and growth opportunities, including the acquisition of Minimalist in India and Wild and Dr. Squatch in the Personal Care portfolio.

Overall, Unilever's strong Q2 performance and positive outlook for 2025 have been well-received by analysts, with TD Cowen's Robert Moskow giving the company a Buy rating. The company's focus on premium segments, digital commerce, and emerging markets, along with its operational improvements, position it well for continued growth in the coming quarters.

References:
[1] https://www.unilever.com/news/press-and-media/press-releases/2025/first-half-performance-supports-full-year-confidence/