Unilever PLC

A new boss is coming, but this consumer staples giant will chug along regardless. The firm’s well-known brands will...

A new boss is coming, but this consumer staples giant will chug along regardless. The firm’s well-known brands will help protect profits and market share, but the world has changed, and Unilever must play to its current strengths. I rate the stock an Add as it is undervalued by 23% and offers a 7% IRR.

Run down

• Company name: Unilever PLC

• Ticker: $ULVR

• 52-week range: £32–£42

• Market cap: £100bn

• Price: £39

• Target: £42–54

• Upside: +23%

• Recommendation: Add

I) Story

Business model

Unilever is a large British consumer goods company. It makes branded food, beauty, and personal care products which it sells worldwide. The firm has 400 different brands, 13 of which have annual sales of over £1bn ($980m). Four-fifths of their brands are in the top two in their markets, and 13 of the 50 Kantar brands, a rank of brands' values, belong to Unilever.

The company gets 22% of its revenue from Europe, 32% from the Americas, and the other 46% from elsewhere. It's the fourth-largest consumer goods company worldwide by e…