Unilever’s Dividend and Buyback Power Up a 33% Upside Case

Unilever (LON:) has the leverage for its stock price to hit new highs in 2025, at least according to the analysts’ sentiment trends.

Those trends include significantly increased coverage since the lows of 2023, firming sentiment with MarketBeat’s reported consensus up to Moderate Buy from Reduce compared to last year, and a rising price target.

The price target is most interesting in mid-May 2025, up 28% in the preceding 12 months, 5% since the latest earnings report, and a new all-time high when reached.

The post-release analysts’ activity aligns with these trends, including an upgrade to Hold from Reduce, and an indication that this stock could move into the high-end range of targets.

That puts the price for Unilever above $70 and heading higher over the long term.

Why Do Analysts Like Unilever?

Analysts like Unilever for numerous reasons, beginning with its market-leading position in the Consumer Staples sector. This sector is typically less cyclical than others and provides visible revenue, cash flow, and capital returns for investors.

Stocks like Unilever also tend to have low beta, a measure of market volatility, making them less risky relative to the broad market.

Regarding Unilever, its brand-strong, diverse portfolio includes numerous globally recognized brands, including Hellmann’s, Ben & Jerry’s, Dove, and Lifebuoy. Although its quarterly growth has been sporadic over the past few years, it is trending steadily higher on a YOY basis and driving ample cash flows for its capital return.

Unilever’s capital return is attractive, including the dividend and share buybacks. The dividend is worth roughly 3.4% in mid-May and is reliable at 60% of earnings, with earnings growing and the balance sheet healthy. The only downside is that the payout can be erratic quarterly, but the trend offsets it; the payout tends to increase annually over time.

Regarding the buybacks, the company buys back shares annually and is on track to complete its roughly $2 billion authorization before the end of the current quarter.

Unilever Grows in Q1; Positions for Long-Term Success

Unilever had a solid quarter in FQ1 with organic growth of 3.5% and solid margins.

Gains in all five operating segments drove the company’s strength, led by above-average performance in Beauty, Personal Care, and Ice Cream.

Volume and pricing were both positive factors, rising by 1.2% and 1.7% respectively, and led the company to reaffirm guidance.

Unilever expects to grow its organic business by 3% to 5% and may exceed guidance due to rapidly improving macroeconomic conditions related to trade relief.

Other highlights from Q1 include an update on the Ice Cream divestiture. The company says it is on track to complete the divestiture, which will leave the Ice Cream segment as a stand-alone business. The move would raise as much as $8 billion, bolstering the company’s balance sheet and capital return outlook.

Unilever Pulls Back: Investors Can Take Advantage of Lower Prices

Unilever’s stock price pulled back in May, opening an entry for investors. The pullback may continue, but is unlikely to get far due to the analysts’ sentiment, capital return outlook, and long-term stock price trends. Although the market has been choppy and rangebound since about 2017, it is trending higher over the long term and is set up to hit new highs soon.

The market for this stock could extend its trend significantly in that scenario, potentially rising by the magnitude of the trading range within a few months, a $20 or roughly 33% gain in addition to the dividend.

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