CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Unilever shares set to rise ahead of Q3 earnings, HQ unification nears

The Anglo-Dutch consumer goods company has delivered a resilient performance amid the backdrop of Covid-19 and is set to see its share price climb higher if it can deliver strong Q3 earnings this month and unify its HQ in the UK.

  • Unilever will unveil its Q3 earnings on 22 October
  • The Anglo-Dutch company’s shares set to soar as UK HQ unification nears completion
  • Unilever shares outperform broad market, up 11% year-to-date

Unilever will unveil its third quarter (Q3) earnings on 22 October, with the stock likely to trade higher this week due to company’s resilient performance against the backdrop of Covid-19.

‘Performance during the first half has shown the true strength of Unilever,’ Unilever CEO Alan Jope said. ‘We have demonstrated the resilience of the business – in our portfolio, in a continued step-up in operational excellence, and in our financial position - and we have unlocked new levels of agility in responding to unprecedented fluctuations in demand.’

The Anglo-Dutch consumers goods company is also likely to see its share price move higher once it unifies its headquarters in the UK, a process that will streamline its cumbersome structure which has complicated major takeovers and hindered its offloading of poorer performing assets.

‘We have also taken action to strengthen the strategic future of the company by announcing proposals to unify our dual-headed legal structure, progressing the strategic review of our global tea business and making new commitments to help protect the climate and regenerate nature,’ Jope added.

Unilever is trading at £48.27 per share at the time of publication, with the stock outperforming the broader market with it up 11% year-to-date.

Dutch ‘departure tax’ poses hurdle to UK HQ unification

Despite Unilever securing support from shareholders to streamline its structure and move its headquarters to London, the company has warned it the process still faces a potential hurdle in the form of the so-called Dutch ‘departure tax’.

The new tax is being proposed by the Dutch opposition Green Party and could potentially make Unilever’s UK unification prohibitively expensive. However, the proposed legislation is still in its early stages and could be viewed by the European Union of breaching its laws on freedom of establishment and free movement of capital, according to a statement by Unilever.

FTSE 100 declines halts, yet further losses seem likely

The FTSE 100 has taken a breather following a bearish start to the week yesterday, according to Josh Mahony, senior market analyst at IG.

‘The wider downtrend in play did point towards a likely bearish reversal from the 61.8-76.4% resistance zone,’ Mahony said. ‘With that in mind, further downside looks likely in accordance with the downtrend seen since June.’

‘An upside move could come to bring us back into a deeper retracement at 5981 (76.4%), yet a bearish outlook holds unless we see price rise through the 6041 resistance level,’ he added.

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  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Unilever PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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