Image source: Unilever plc
The last 12 months have been terrific for Unilever‘s (LSE:ULVR) share price. The consumer staples giant seems to be having little trouble attracting shoppers to its premium brands such as Dove, Hellmann’s, Ben & Jerry’s, and Knorr. And with management recently reaffirming the outlook for 2025, the stock’s climbed over 25% over the past year.
So the question now becomes, can it deliver on these expectations? And how far could the Unilever share price climb to if it does?
Here’s what experts are thinking
Last month, Unilever gave shareholders a bit of insight into where the company stands. And as previously mentioned, management took this opportunity to reaffirm its full-year guidance, which includes:
- 3-5% of underlying sales growth with improved balance between product volume and price
- Underlying operating profit margins are on track to modestly expand, with improvements materialising in the second half of the year
- The net debt-to-underlying EBITDA to reach around 2.0, essentially in-line with the 1.9 achieved in 2024.
Looking at the latest institutional analyst forecasts, these appear to reflect management’s guidance closely. One interesting observation is that revenue growth expectations appear to sit closer to the bottom of Unilever’s range. As such, if the firm can deliver results towards the 5% mark, that could spark some extra positive sentiment from investors.
Based on all these targets, the current average 12-month share price projection across 18 analysts for Unilever stands at 5,031.08p. Compared to where the business is trading today, that indicates investors could enjoy another 7.3% jump moving forward along with a further 3.2% from dividends. Therefore, a £1,000 investment today could become £1,105 by April 2026.
What could go wrong?
As a consumer staples business, Unilever has historically been fairly resilient in wobbly economic backdrops. However, that doesn’t mean buying shares today is a surefire way to build wealth. Tariffs and trade disputes are likely to raise commodity and raw ingredient prices, increasing the cost of production.
With powerful brands in its portfolio, Unilever will likely be able to pass those costs onto customers. But there are always limits to pricing power. And if it hikes price tags too high, it could push customers into the arms of cheaper alternatives, causing sales volumes to suffer – something we’ve previously seen during the cost-of-living crisis in 2021.
Depending on how the global trade situation evolves throughout 2025, Unilever may fall short of expectations. And in that scenario, the stock could actually fall from its current levels, destroying wealth rather than creating it.
But given the firm’s long operating history, I’m comfortable giving Unilever shares the benefit of the doubt. I’m not seeking to add further exposure to this sector, but for investors looking for a defensive investment, Unilever may be worth mulling over.
