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Unilever full-year results: where next for the share price?

The consumer goods company will unveil its full-year results on Thursday, with analysts from Jefferies warning that the maker of Dove soap is vulnerable to an activist investor due to its low valuation after a sales downgrade.

Analysts from Jefferies said that Unilever could be vulnerable to an activist investor after the the company issued a sales downgrade in December that sent its shares lower.

In a note ahead of the company’s full-year results on Thursday, analysts at the US-based investment bank warned that the stock’s low valuation was an ‘invitation to activism’.

Get the latest updates on Unilever's earnings as they happen

‘The last time Unilever was in this sort of pickle was in January 2017 — we all know what happened next,’ Jefferies said in a note, referencing the hostile bid Kraft Heinz made two years ago.

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Sales downgrade sends Unilever shares lower

Unilever expects underlying sales growth for 2019 to come in slightly below its guidance of the lower half of its 3% - 5% multi-year range.

‘Due to challenges in certain markets, we expect a slight miss to our full year underlying sales growth delivery,’ Unilever CEO Alan Jope said.

‘While we expect improvement in H1 2020 versus this quarter, we expect that first half growth will be below 3%,’ he added.

‘Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.’

Following the downgrade, Unilever saw its shares fall by as much as 9% to £42.40 on 8 January. However, the stock has recovered slightly since then, closing at £44.28 on Monday.

Analysts expects Unilever to deliver sales of €52 million in its 2019 full-year results on Thursday, up from €51 billion last year, with underlying pre-tax profit forecast to come in at €9.9 billion, up from €9.4 billion in 2018.

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