Is UL a good stock to buy? We came across a bullish thesis on Unilever PLC on Capital Blueprint’s Substack by Jin. In this article, we will summarize the bulls’ thesis on UL. Unilever PLC’s share was trading at $61.20 as of June 29th. UL’s trailing and forward P/E were 20.59 and 17.12 respectively according to Yahoo Finance.
Unilever PLC operates as a fast-moving consumer goods company in the Asia Pacific, Africa, the Americas, and Europe. UL is positioned as a global consumer goods leader undergoing a significant portfolio transformation toward a higher-margin, faster-growing HPC-focused business, with the planned McCormick Foods combination (expected by mid-2027) acting as a key catalyst to simplify the group and enhance its earnings quality.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich
Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
The company operates across Beauty & Wellbeing, Personal Care, Home Care, and Foods, with strong category leadership where ~90% of turnover sits in number one or number two market positions, supported by powerful global brands such as Dove, OMO/Persil, Domestos, and Hellmann’s. The core investment thesis is driven by accelerating volume-led growth, improving mix, and structurally expanding margins, with FY2025 underlying sales growth of 3.5% and Q1 2026 growth of 3.8% driven primarily by volume expansion, signaling a durable consumer demand recovery rather than inflation-led pricing.
Gross margins have expanded to ~46.9%, with a clear pathway toward 48–50% post-Foods exit, while operating margins remain robust above 20%, reinforcing strong cash generation and pricing power. Emerging markets, contributing over 60% of revenue, provide a long-term compounding engine, particularly in India, Indonesia, and Brazil, where Unilever continues to gain share through localized brand strength. Capital allocation remains disciplined, with €6 billion returned in 2025 and additional buybacks planned through 2026–2029, supporting shareholder yield.
The market currently prices the stock near ~11x earnings, close to a 10-year low, reflecting pessimism around FX headwinds and execution risk, despite consensus price targets implying ~25–30% upside to approximately $70–72 per share.
If the McCormick transaction unlocks a cleaner HPC profile and drives multiple re-rating toward ~19–20x earnings, Unilever could deliver meaningful upside revaluation alongside margin expansion and sustained volume growth. Overall, the company presents a compounding consumer franchise in transition, with improving fundamentals, strong brand equity, and a favorable long-term setup that remains underappreciated by the market.
Previously, we covered a bullish thesis on Colgate-Palmolive Company (CL) by Kontra in October 2024, which highlighted its defensive quality compounder profile driven by strong pricing power, ~59% gross margins, ~28% ROIC, and resilient emerging market exposure supporting long-term compounding. CL’s stock price has depreciated by approximately 8.02% since our coverage. Jin shares a similar view but emphasizes Unilever’s portfolio transformation, margin expansion potential, and McCormick-led re-rating catalyst.
Unilever PLC is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held UL at the end of the first quarter which was 28 in the previous quarter. While we acknowledge the risk and potential of UL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
