ShoreCap labels Unilever as long-term winner in FMCG sector

16th Apr 2015 09:28

Shore Capital has reiterated a 'buy' recommendation on Unilever after the consumer products giant beat forecasts with its first-quarter update, with the broker labelling it as a long-term winner in the FMCG sector.Underlying sales growth in the first three months of the year was 2.8%, ahead of ShoreCap's 2.5% prediction and the consensus estimate of 2.1%, due to strong volume growth and resilient pricing.Meanwhile, total sales growth was 12.3% (ShoreCap: 7%, consensus: 8.8%), helped by a positive currency contribution after a long period of currency headwinds.ShoreCap's Darren Shirley said first-quarter trading was "better than subdued expectations, expectations that had been set by management at its 2014 results statement [...] with Q1 expected to be 'soft' and growth improving through the year".He said it now expects to be upgrading its current earnings per share forecast of €1.71 for the full year following Thursday's update."Unilever's valuation sits comfortably within a basket of its global FMCG peers, and we continue to view the group as a longer-term winner with its leading emerging market exposure (which remains a major virtue despite short-term constraints), strong balance sheet and ongoing margin potential from 'maxing the mix', the focus on home care returns and ongoing operational leverage," Shirley said.The stock was 4.2% higher at 3,057p by 09:53.