Picture supply: Unilever plc
unilever (LSE: ULVR) share value is up a bit, up practically 10% to date in 2026. With high-risk tech shares unstable, it appears to be like like long-term security could also be again in vogue. Nevertheless, the inventory value fell 3% on Thursday (February 12) morning on the again of the 2025 full-year outcomes.
Univer reported underlying gross sales development of three.5%, of which 1.5% was as a consequence of precise quantity development. Of this, the corporate’s “Energy Model” recorded development of 4.3%, with gross sales quantity rising by 2.2%. Nevertheless, income decreased barely as a consequence of foreign money fluctuations and disposals.
For the reason that ice cream enterprise was spun off, margins have improved, with underlying earnings per share (EPS) up barely by 0.7%. magnum ice cream firm. Magnum reported a 20% decline in working revenue on the identical day, however confronted vital separation and restructuring prices.
What does this imply for shareholders?
money reward
An underlying gross revenue margin of 20% resulted in free money stream of €5.9 billion. In consequence, the quarterly dividend elevated by 3%. The board has additionally launched a brand new 1.5 billion euro share buyback program.
Lately, Unilever has refocused its core merchandise and simplified its enterprise. And it appears to be paying off. CEO Fernando Fernández highlighted the next targets:Prioritizes premium section and digital commerce to help development in US and India” And he added:Regardless of the market slowdown, our sharper focus and disciplined execution underpins our confidence for 2026 and past.”
So what ought to we anticipate in 2026? Administration steering signifies annual underlying gross sales development of 4% to six%, primarily based on a minimum of 2% underlying quantity development. And we should always anticipate “.”slight enchancment” is the annual working revenue margin.
General, I fee this as a strong efficiency in a burdened market atmosphere.
Worth proposition?
Unilever’s share value has risen an astonishing 27% over the previous few years. And that now seems to be inserting a defensive premium on the inventory. EPS of 268p provides it a value/earnings ratio (P/E) of 20 for the yr simply ended, which is considerably greater than the earlier yr. FTSE100 long-term common. That is for a inventory with a reasonably common dividend yield of simply over 3%.
Income development for one of these enterprise is at present anticipated to be modest at greatest, even when optimistic. Nevertheless, it appears unlikely that the P/E ratio will decline considerably over the subsequent few years.
My largest concern proper now’s that Unilever inventory most likely appears to be like well-valued, or perhaps even a bit overvalued. And we could possibly be in for a interval of stagnation, particularly if buyers’ current “flight to security” subsides as in the present day’s financial turmoil subsides. I feel that is why the drop in income brought on the instability within the morning efficiency.
This does not imply I do not worth Unilever as an funding. I nonetheless do and suppose new ISA buyers ought to think about this as a comparatively secure foundation for his or her long-term portfolio.