Unilever was among the heaviest fallers in the FTSE 100 today after receiving some unwelcome attention from analysts just days before the release of its second-quarter results.
The consumer goods giant, which produces Dove soap and Ben & Jerry’s ice cream, slid 46p to £27.56 as both Credit Suisse and Oriel Securities advised against buying the shares. Indeed, analysts at the Swiss bank went as far as to cut their recommendation on Unilever to “underperform” - similar to a sell rating - from “neutral” and raised concerns about its household and food divisions.
“Unilever has come a long way: it has restored growth, stabilised and improved market shares and upped its investments. Personal Care has been the forefront of this investment,” the Credit Suisse experts said.
“But there is a lot more to do in both Household and Food. The former has delivered better growth, but at a cost to returns. The latter has seen growth slow sharply and market shares come under pressure. More investment is needed.”
If that wasn’t enough to deter buyers, Chris Wickham at Oriel - who repeated his “hold” rating on the shares – voiced his own concerns about a potential slowdown in fast-growing emerging markets, which are vital to the company.