Unilever under the cosh after Goldman downgrade

12th Aug 2015 08:21

(ShareCast News) - Unilever was the worst performer on the FTSE 100 on Wednesday morning after Goldman Sachs downgraded the stock to 'sell' from 'neutral' and cut its price target to 2,560p from 2,820p.Goldman said the consumer goods company was negatively positioned with respect to the changes in the retail environment as the e-commerce channel grows.It expects the food and homecare divisions, which made up around 45% of 2014 sales, to come under pressure from higher proliferation in stock-keeping units.In addition, the bank noted that around 60% of Unilever's sales come from emerging markets, for which it expects structurally lower growth versus prior years and more competition in mass-market categories from local companies."While we believe the recent investment in prestige beauty brands is a positive move into an attractive market, this still represents less than 1% of sales," it said.Unilever is due to report third-quarter earnings on 15 October and GS said any comments on slower growth in the struggling spreads division and further slowing in emerging markets would be taken negatively by investors.Risks to the bank's view and price target include better-than-expected adaption to the e-commerce channel, faster-than-expected economic growth in emerging markets, and further disposals within the food division or larger acquisitions within prestige beauty.At 0825 BST, Unilever shares were down 3.1% at 2,821p.