In major news on UK stocks, Unilever PLC (GB:ULVR) announced its plan to split its ice cream business into a stand-alone entity and launched a productivity programme, aiming to drive growth through a simpler organization. The plan includes 7,500 job cuts globally. Following the announcement, Unilever shares were trading up by over 3% as of writing.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Unilever is a leading FMCG company, boasting a portfolio of brands such as Dove, Knorr, Lifebuoy, Axe, Sunsilk, Lux, etc. The company’s ice cream portfolio includes well-known brands like Walls, Ben & Jerry, and Magnum and generated a turnover of €7.9 billion in 2023.
Unilever’s Major Revamp
Unilever believes that it should prioritize building a portfolio of exceptional brands in appealing categories with complementary operating models. However, the ice cream business has a different operating model, including supply chain factors, seasonality, and higher capital intensity. The board believes the decision to separate the ice cream division will drive growth for both the ice cream segment and Unilever.
The separation is also expected to speed up the company’s growth action plan (GAP), announced in October 2023. The plan aims to boost the topline while focusing on simplicity and productivity. The process will begin immediately, with the full separation anticipated to conclude by the end of 2025.
Unilever also launched a productivity programme, which will generate total cost savings of €800 million in the next three years. The total restructuring expenses are estimated to be around 1.2% of the company’s turnover for the next three years.
Is Unilever a Good Stock to Buy?
On TipRanks, ULVR stock has a Moderate Sell consensus rating based on a total of 11 recommendations. It includes two Buy, four Hold, and five Sell recommendations. The Unilever share price target is 3,977p, which is almost similar to the current trading price.
