UNILEVER PLC FINANCIAL ANALYSIS
Date
2024-02-24
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Publisher
University of Surrey
Abstract
Unilever is a British consumer goods multinational organisation headquartered in London. The company is considered one of the world's largest organisations in the industry based on revenue. This paper examines the company’s overall performance in the past 5 years and creates a forecast for the next 5 years. The company shows great prospects in the future in terms of projected sales, which were forecasted to increase from €60,073 million in 2022 to approximately €75,155 million in 2027. Net profits were also expected to increase from €8,269 million in 2022 to €15,982 million in 2027. Furthermore, it was expected that the company’s cash flows would improve significantly in the next 5 years.
Description
The performance of the company has been greatly influenced by various industry forces including consumer preferences, technology, globalization, and economic factors. Competition within the industry is high due to the high number of firms in the industry, which are continuously looking to differentiate their products. The industry has also been greatly affected by the COVID-19 pandemic which increased demand for certain products while decreasing for others.
Analysis of Unilever's share price in 2022 revealed that the company’s share prices remained relatively constant, ranging from a low of €40.1 to a high of €48.765. Further analysis revealed that the share prices were below its sales, book value, and earnings. The company’s shares therefore experienced an undervaluation in the market, which reflected poor prospects from shareholders about the company’s growth. Furthermore, different valuation methods were employed including DDM, DCF, discounted abnormal earnings, and price multiples. The DDM valuation model was adopted, estimating the company’s value at €155,697 million.
Keywords
UNILEVER PLC FINANCIAL ANALYSIS