Unilever left at 'buy' by Canaccord after full year results

Unilever’s ‘buy’ rating and 3415p price target were left unchanged by Canaccord Genuity on Tuesday after the company reported better-than-expected fourth quarter results.

The consumer goods giant reported a 6% fall in full year pre-tax profit to €7.2bn, despite a 10% increase in turnover to €53.27bn, as a slowdown in markets hit growth and the company warned of tougher times ahead.

Core operating profit at the Marmite maker was up by €0.9bn at €7.9bn, while underlying sales growth was up 4.1%, with volumes up 2.1% and prices rose 1.9%.

Fourth quarter organic sales rose 4.9%, ahead of the 4% consensus forecast, driven by 8.1% growth in emerging markets, which Canaccord said alleviated concerns about economic weakening in China and Brazil.

“Unilever's fourth quarter demonstrated a continuation of the very resilient top line growth and moderate operating margin growth which it had delivered in the first nine months of 2015," according to analysts Eddy Hargreaves and Alicia Forry.

“While core earnings per share of €1.82 for full year 2015 was no more than in-line, we expect the strong (+8.1%) organic growth in emerging markets in fourth quarter 2015, a meaningful improvement in Home Care margins, and management change in Spreads all to be taken well.”

Shares rose 1.8% to 2,896p at 1052 GMT.