Financial Services

Here are the biggest analyst calls of the day: Apple, Disney, Under Armour, homebuilders & more


Unilever plans to grow 200bp ahead of its market growth (1% from market share gains and 1% from Portfolio) but this is not happening because of acquisition mis-steps (Blue-Air in China) and global share gains of 50% rather than the 60% needed to deliver its medium-term top-line targets. We are concerned about the performance of its Beauty and Personal Care division, its biggest, most profitable and strategic business (38% of sales, 48% of EBIT) which has had two mediocre years and is being left behind in growth terms by L’Oréal and Estee Lauder, which are much more premium. Its margins also reached 22% in 2018, 360bp above L’Oréal and 530bp above Estee Lauder, where we would question sustainability. Management has not closed the door to a margin reset, saying they would always favour growth over margin, but it will depend on whether it can improve its competiveness in short order. Even if it hits the 20% margin target in 2020, it will likely be difficult to persuade the market that there is much runway beyond then. Finally, we think the aborted move to simplify the NV/PLC structure reduces the likelihood of big corporate change that could drive a re-rating.”



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