Berenberg has revised its recommendation on Unilever plc, downgrading the stock to Hold from Buy and at the same time lifting the bank's price target to GBP58.40 from GBP56.00. The analyst action comes alongside adjustments to the firm's financial forecasts and valuation assumptions.
The bank said Unilever has completed a company-wide transformation that has produced a simpler, leaner and faster-growing enterprise that is more profitable than it was two to three years ago. Berenberg added that the recent rally in Unilever's shares has already incorporated much of that improvement into the market valuation.
InvestingPro data referenced by the firm indicates the stock's relative strength index - RSI - is in overbought territory, a technical signal that underpins Berenberg's more cautious stance despite the operational progress. The stock is trading near its 52-week high after strong returns over the past month, the firm noted.
Following updates tied to Unilever's recently released 2025 results, Berenberg lowered its fiscal 2026 earnings per share forecast by 1.4%. The revision reflects updated assumptions for organic sales growth, currency movements and the average cost of debt.
The new price target is generated from a discounted cash flow model that has been rolled forward. On that basis, Berenberg's target implies roughly 9% upside from prevailing market levels.
Market listings for the company were restated in the firm's note: Unilever shares trade on the London Stock Exchange under the ticker ULVR:LN and on the New York Stock Exchange as NYSE:UL.
On the results front, Unilever disclosed fourth-quarter 2025 revenue of 12.59 billion USD, substantially below the 15.95 billion USD figure that had been expected - a shortfall of about 21%. The company did not report any mergers or acquisitions in the period. Berenberg's revision and the published quarterly results arrive as analysts and investors continue to focus on Unilever's financial performance. The firm also observed that there were no broader updates regarding any other analyst upgrades or downgrades for Unilever at the time of its note.
For investors seeking additional context, InvestingPro provides nine further exclusive insights on Unilever, including detailed valuation metrics and comprehensive Pro Research Reports intended to convert complex Wall Street data into actionable analysis.
Analysis and context
Berenberg's action encapsulates a trade-off visible to investors: the company has demonstrably improved its operating profile - simpler structure, faster growth and higher profitability - but the market has moved to price in much of those gains. The bank's move to raise the price target while downgrading the rating signals that, in its view, upside is narrower from here and valuation warrants more defensive positioning.
At the same time, the downgrade comes after a notable quarterly revenue miss in Q4 2025, which may have influenced the firm's downward tweak to 2026 EPS expectations and its adjustments to sales, currency and debt cost assumptions.
Investors should note
- Despite the downgrade, the new price target implies about 9% upside from current levels based on a rolled-forward discounted cash flow analysis.
- Technical indicators cited by the firm suggest the share price is in overbought territory, reinforcing a more cautious stance.
- Unilever's Q4 2025 revenue was materially below expectations, with no reported M&A activity during the period.