ULVR: Ice Cream Spin-Off Delay Will Still Support Higher Long-Term Pricing Power

Analysts have raised their price target on Unilever from approximately $50 to about $56, reflecting increased confidence in the company’s long term fair value and profitability trajectory following supportive recent research coverage.

Analyst Commentary

Recent Street research underscores rising optimism around Unilever’s strategic positioning, with a notable Buy initiation and a price target meaningfully above the newly raised $56 objective. This is viewed as implying further potential upside if execution remains on track.

Bullish Takeaways

• Bullish analysts highlight the gap between the current trading level and the high $60s price target as evidence that the market is still underestimating Unilever’s long term earnings power and cash generation.
• They point to portfolio simplification and focus on higher margin categories as key drivers of operating leverage, supporting a re-rating of the shares toward a premium consumer staples valuation.
• Stronger pricing power and disciplined cost control are seen as catalysts for sustained margin expansion, which could accelerate earnings growth above current consensus expectations.
• Improved capital allocation, including a clearer framework for dividends and potential buybacks, is viewed as a support for total shareholder return and a justification for higher fair value estimates.

Bearish Takeaways

• Bearish analysts caution that the more ambitious price targets leave less room for error, especially if volume growth slows or pricing momentum fades in a weaker consumer environment.
• There is concern that ongoing restructuring and portfolio changes may take longer than expected to translate into consistent top line acceleration, limiting near term multiple expansion.
• Competitive pressures in key emerging markets and increased marketing spend could weigh on margins, challenging the assumption of a smooth margin improvement trajectory embedded in more optimistic valuations.
• Execution risks around strategy shifts, including potential divestitures or acquisitions, could introduce earnings volatility and delay the realization of the higher long term fair value case.

What's in the News

• Unilever has delayed the planned demerger of its Magnum ice cream unit, citing the U.S. government shutdown, but remains confident it can launch the spin off later this year (Reuters).
• The company reported stronger-than-expected underlying sales as it prepares to spin off and list its ice cream business, including Magnum and Ben and Jerry's, in Amsterdam this year (company announcement).
• Unilever, Alcoa and Ball unveiled the first use of ELYSIS carbon free aluminum smelting technology in consumer personal and home care packaging, creating one of the lowest carbon aerosol can solutions of its kind (company announcement).
• Dove, one of Unilever's leading beauty brands, announced a multi-year partnership with Madison Square Garden Entertainment that makes Dove an official partner of the Rockettes and the 2025 Christmas Spectacular, featuring extensive in-venue activations and a nationwide Holiday Treats product rollout (company announcement).
• Unilever shareholders approved amendments to the company's articles of association at a general meeting held on October 21, 2025, following a special shareholders meeting in London (company announcement).

Valuation Changes

• The fair value estimate has risen moderately from approximately $49.55 to about $56.02, aligning with the higher price target and implying a higher assessed intrinsic value.
• The discount rate has fallen slightly from about 8.32 percent to roughly 8.23 percent, indicating a marginally lower perceived risk or required return in the valuation model.
• The revenue growth assumption has decreased meaningfully from around 2.32 percent to about 1.31 percent, reflecting a more conservative outlook on top line expansion.
• The net profit margin has increased modestly from roughly 12.60 percent to about 12.78 percent, suggesting a small improvement in expected profitability.
• The future P/E multiple has risen notably from about 21.4x to approximately 24.4x, pointing to a higher anticipated valuation multiple on forward earnings.