A poor summer in Europe and difficult trading conditions in other areas contributed to a slowdown in business
Unilever (ULVR) shares slip as it warns it will miss 2019 sales target
- Group expects 2019 underlying sales to be in the lower half of its 3-5% range
- Sales in the first half of 2020 is expected to be below 3% with the majority of growth weighted towards the second half
- The shares trade down this morning in excess of 5% and news this morning is dragging down peers such as Reckitt Benckiser, Nestle and Danone
- Recommendation: We maintain our Buy recommendation for Unilever and see long term growth for the group. We would take the reduced price today as an opportunity to drip feed for the longer term
In the updates leading up to today there have been signs of a slowdown in various parts of Unilever’s business, such as in India and China, and poor weather in the summer hampered ice cream sales in Europe. Despite the fact overall emerging market sales were doing reasonably well, it should not come as too much of a surprise that this morning the group released a sales update and forecast growth projections that caught up with the evidence. The household goods company already indicated a slowdown in its markets at its Q3 update and blamed the economic slowdown in South Asia and difficult trading conditions in South Africa, while developed markets trading environments are also difficult.
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