Unilever shares: Price analysis before buying or selling

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Yes

ISIN code: GB00B10RZP78

Ticker: LON: ULVR

Index or market: FTSE 100

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Elements to consider before selling or buying Unilever shares

Analysis N°1

The investments of the group in companies from other sectors apart from consumer goods would enable Unilever to effectively diversify its product range.

Analysis N°2

The efforts made in order to improve the innovative nature of the company and create new products as well as increase the appeal of existing products.

Analysis N°3

The methods implemented by this company in order to align its activities with current global environmental concerns.

Analysis N°4

The growth of the market parts of this sector and the strategy of Unilever’s direct competitors is of course highly important in order to anticipate the financial performance of this group. It is also recommended to monitor imitation products by local companies that boast attractive prices or generic brands directly developed by retailers and suppliers that are sold through their networks.

Analysis before buying or selling Unilever shares

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General presentation of Unilever

Before buying or selling Unilever shares, a good knowledge of the company is essential to analyse its stock market price. Here is a presentation of the company and its activities:

Unilever N.V. is a leading global manufacturer and marketer of food and household products. It operates in more than 190 countries and has a portfolio of famous brands worldwide. The company is divided into two business areas: personal care and food products.

The personal care business accounts for 62.9% of Unilever's sales, with two major product categories: personal care products and home and laundry care products. Personal care products represent 66.9% of the turnover of this category, with brands such as Dove, Sunsilk, Lux, Pond's, Axe, Rexona, Signal and Close Up. Household and linen care products represent 33.1% of the turnover in this category, with brands such as Omo, Skip, Comfort and Cif.

The food sector accounts for 37.1% of Unilever's turnover. It consists of three major categories: culinary products, sauces, oils and margarines, ice cream and drinks. The leading brands in this sector are Knorr, Hellmann's, Amora, Rama, Magnum, Carte d'Or, Solero, Ben & Jerry's and Lipton.

In terms of geographical distribution, Europe accounts for 21.9% of Unilever's turnover, while Asia, Africa, Middle East, Turkey, Russia, Ukraine and Belarus account for 46.4%. The Americas account for 31.7% of the company's turnover. Unilever employs approximately 155,000 people worldwide.

The company has a long history of sustainability and social responsibility. It is committed to reducing its carbon footprint and tackling climate change by reducing its greenhouse gas emissions and working with its suppliers to improve their carbon footprint. Unilever is also committed to projects to improve the lives of farmers and to combat deforestation.

Photo credits: ©conectus/123RF.COM

The major competitors of Unilever

In order to anticipate future changes in the Unilever share price in the best possible way, you also need to be familiar with its main competitors. Here we take a closer look at them.

Kraft Foods Group

This company specialises in the food sector and is mainly present in North America, including the USA and Canada. It is a company listed on the NYSE in the United States, which subsequently merged with Heinz in 2015.

Nestlé

This Swiss multinational is one of the world's leading food companies and the largest dairy company in the world. It specialises in the processing and sale of a wide range of food and beverage products for human and animal consumption. It is listed on the SIX Swiss Exchange.

Coca-Cola

The Coca-Cola Group is an American company specialising in non-alcoholic beverages, but also one of the largest American companies in the world and the third largest in the food sector in terms of turnover.

Procter & Gamble

This other US multinational specialises in consumer goods including personal care products. It currently employs over 105,000 people worldwide.

Danone

Next is Danone, a French multinational listed on the Euronext market on the Paris stock exchange. It is also part of the CAC 40 stock market index. The company was created following the merger in 1973 of the French groups Gervais-Danone and Boussois Souchon Neuvesel, which in turn resulted from several successive mergers of companies in this sector. It was only in 1994 that the name of the group's fresh produce brand Danone was chosen as the name for this company. At that time, the group was the French leader in the food industry and number three in this sector on the European market.

The major partners of Unilever

Of course, Unilever has reached this level of profitability and sales volume thanks to a well-established development strategy based on numerous redemptions and mergers, but also thanks to the implementation of certain strategic partnerships.

Pepsico

In 2003, Unilever established a strategic partnership with one of its competitors, namely Pepsico, with which it created a joint-venture giving birth to the range of ready to serve Lipton tea.

Intersuchel

Most recently in 2016, Unilever signed a deal with a Cuban company named Intersuchel with the purpose of creating a joint-venture which they’d call Unilever Suchel. Consequently, Unilever is now considering launching a line cosmetics, personal hygiene and personal care products which would be based in Cuba.

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The factors in favour of a rise in the Unilever share price:

Before investing online in the Unilever share price it is of course important that you understand the strengths and weaknesses of this company and therefore its ability to face the future which will of course influence the movements of its share price on the stock markets. We will therefore commence with detailing the major strengths and advantages of this company and its share price as a stock market asset.

Initially, we would of course bring to mind that the major strength of the Unilever group lies with the diversity of its various brands. This group does of course own certain brands that are extremely popular and benefit from strong positions on the consumer goods market. Due to this strong advantage Unilever benefits greatly from a strong penetration of the markets that is greater than many of its direct competitors which enables this company to easily gain other market parts.

The strategy implemented by Unilever over the last few years that has prioritised the increase in its size and the variety of its products through mergers and acquisitions around the world has also enabled the group to improve its organisational growth and therefore of course its revenue. This is therefore another strong point of this group.

We also note that the Unilever group has perfectly mastered the economies of scale. Due to this it is able to benefit from a productive efficacy and thereby implement an attractive pricing policy to increase consumer appeal and lead to an improved production flow of its products.

We also note of course the expansion abilities of the Unilever Company on an international level that has occurred after several years of strategy. Increasingly present on the worldwide market Unilever has therefore increased its position year by year in popularity which is of course another of its strong points.

We could therefore summarise the strength analysis of the Unilever Company as a group that has the capacity of maintaining its growth in the coming years and consolidate its presence on the consumer goods market worldwide.

The factors in favour of a drop in the Unilever share price:

After reviewing the major advantages of the Unilever Group it is now time to also examine the group’s major weaknesses as although this company does have many strong points it also has a few weak points that should also be taken into account.

Firstly, one of the major weaknesses of the Unilever group is related to the actual type of its products. In fact Unilever mainly sells products that can be imitated and therefore easily sold in competition by other companies. This problem occurs even though Unilever has invested significantly in the development of useful and innovative products and it could well represent a true risk of losses.

The fact that the Unilever group has concentrated its activities in the production and sale of only consumer items is also a handicap for this company. In fact, its competitors that have extended the range of their products are also more likely to generate revenue from these different sectors.

Finally, we also note that the Unilever group heavily depends on its external distribution network and retailers to commercialise its products which stops it from having a direct influence on the consumers apart from the centralised advertising it can run on its products.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

On which markets are the Unilever Group shares listed?

The Unilever Group is a group that is, as you may already know, listed on several markets. This is due to the fact that the group is a Dutch-British group. For example, you can follow the listing of its shares both on the Euronext Amsterdam Market, on the London Stock Exchange in London and also on the NYSE market in the United States. If you trade the share from Europe, you will probably follow it on Euronext or the LSE.

On which stock market indices can the Unilever share be found?

As stated above, the Unilever share price is listed on Euronext Amsterdam, London Stock Exchange and NYSE. As a result, the company is also included in the composition of three major benchmark stock market indices, including the AMX for the Dutch market, the FTSE 100 or Footsie for the UK market and the Euronext 100 Europe-wide.

How to make a successful technical analysis of the Unilever share?

In order to set up a good technical analysis of the Unilever share, you must first of all use the right graphs. For example, we recommend the innovative charts on online trading platforms, which allow you to display different indicators simultaneously. In your technical analysis, you should focus on trend indicators, but also on volatility indicators and the various turning or acceleration points such as pivots, supports and resistances.

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Analysis before buying or selling Unilever shares