Jefferies has issued an 'Underperform' rating on Unilever shares, with an unchanged target price of 4,100 pence.

"We anticipate a lag in organic sales growth in the third quarter, with a forecast of 3.3% against a consensus of 4.1%", says the analyst, who points out that Unilever will publish its third-quarter sales report on October 24.

Unilever has outperformed the FMCG sector in Europe this year, with +34% versus 2% for the MSCI Consumer Staples Index.

Furthermore, the 15.8 to 19 times projected earnings per share (NTM PE) revaluation reflects the company's ability to find around 2 percentage points of additional organic sales growth per year in the medium term compared with pre-COVID rates, and to restore maximum operating margin (19% or more) by around 2026.

Nevertheless, 'challenges ahead could threaten this growth momentum over the next four quarters', believes the broker, who points out in particular that slower growth in key segments, such as prestige beauty, and lower demand in Latin America, could affect the company's performance over the next few quarters.

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