Broker snap: Investec upgrades Unilever ahead of Q4 results

21st Jan 2013 09:14

Investec has upgraded its recommendation for consumer good group Unilever from 'hold' to 'buy' ahead of this week's fourth-quarter results."The principle catalysts for our change of view are the potential for margins to surprise on the upside in FY13 and a belief that the Developing Market business is still being undervalued," said analyst Martin Deboo.As for the margin, while consensus estimates are for an improvement of 30 basis points, Deboo said that there's room for a positive surprise. This is due to: "i.) a more benign commodity environment ii.) actions to address perennial cost drag iii.) better management of mix and iv.) the fruits of accelerated capex".Deboo concluded: "From a macro, strategic perspective, Investec is bullish on equities in 2013 and has resumed an overweight stance on staples. In our opinion, this all points in the direction of renewed enthusiasm for Unilever."The target price for the shares has been lifted from 2,400p to 2,800p.Shares were up 0.66% at 2,444p by 09:29.BC