Unilever downgraded to Underperform from Sector Perform at RBC Capital

RBC Capital analyst James Edwardes Jones downgraded Unilever (UL) to Underperform from Sector Perform with a price target of 4,000 GBp, down from 4,800 GBp. Unilever does not have the “wherewithal” to boost volume performance sufficiently to achieve its 2% growth aspiration given its lack of market dominance, significant non-focus brands and markets, a less benign gross margin environment and intention of significantly lower capital investment than the competition, the analyst tells investors in a research note. In addition, the firm says the stock’s valuation is “pushing towards best-in-class level” that is unjustified. As such, Unilever’s risk/ reward is “weighted to the downside,” contends RBC.