Broker snap: Unilever makes good start to tough year

29th Apr 2010 12:08

Results from consumer goods leviathan Unilever were better than expected but Charles Stanley thinks the scope for earnings upgrades is limited in view of expectations that trading conditions will get tougher as the year progresses."Commodity costs will increase over H2 2010 [second half of 2010], economies will remain sluggish and competitive intensity will remain high," Charles Stanley analyst Jeremy Batstone-Carr predicts. The Anglo-Dutch company continues to focus on profitable volume growth whilst delivering sustainable improvements in operating margin and strong cash flow, and the shares are rated below many of its global peers at 14 times projected 2011 earnings, Batstone-Carr notes.The yield is supportive, the broker adds, and underpins Charles Stanley's unchanged "accumulate" recommendation.