RBC announced on Monday that it had downgraded its opinion on Unilever shares from 'perform in line with sector' to 'underperform', with a target price cut from 4800 to 4000 pence.

The Canadian broker believes that the FMCG group does not have sufficient resources to achieve its 2% growth target, due to its lack of market leadership.

In his view, the Anglo-Dutch group will only have a 'leading' position in half its categories once the ice cream business has been split off.

RBC also points to the company's history of under-investment compared to its competitors, a trajectory it intends to maintain in the future.

While the stock's valuation now places it among the best in the sector, the broker deems this premium 'unjustified' and considers that the risk/return profile is currently trending downwards.

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