Unilever remains overpriced for Nomura analysts

23rd Jul 2015 13:06

(ShareCast News) - Nomura held onto its 'reduce' rating on Unilever, with its forecasts below consensus and a target price more than quarter lower that the shares' current level."Despite a better quarter than we expected, we continue to believe UNA will struggle to get over 3% underlying sales growth in 2015, which is needed to support upside from current valuation levels."The fast-moving consumer goods (FMCG) behemoth reported better-than-expected second quarter and first-half numbers at both the sales and margin level, with second-quarter underlying sales growth of 2.9% versus consensus 2.6%, with Latin American volume leading.Nomura said the positive currency impact of 9.6%, versus consensus 8.4%, could suggest circa 2.0% upgrades to full year consensus.The Japanese bank's full year underlying sale growth forecast of 2.9% is toward the bottom-end of the company guidance of 2-4%, with 2015 EPS estimates at €1.80, roughly 2% below consensus.While Unilever benefits from better pricing in LatAm and easier comparatives in China, this is being offset by "continued deflation in Europe, less resilience in India, further deterioration in key emerging markets such as Indonesia and Russia and promotional intensity in North America".Nomura's price target remained at €30.00 (2,120p), some way below the previous close of 2,934p.