UNILEVER PLC : Updating for McCormick's recent share price weakness

研报英文原文证据摘录

UNILEVER PLC : Updating for McCormick's recent share price weakness

Refinitiv

Investment summary

The tweet investment case: We revise our FY27e/FY28e EPS and TP by c.(2)% to

reflect MKC’s recent share price weakness.

We believe that we are one of the few that incorporate the Foods exit

As we understand it, we are one of the few brokers that incorporate the proposed RMT

with MKC into our estimates. Beyond noting that incorporating the RMT into estimates

was no easy task, we rather struggle to understand why we are still very much in a

minority.

Hence MKC’s recent share price weakness rather matters to us

Rather than speculate on the future value of MKC, we pragmatically decided to

incorporate the RMT into our estimates by utilising the current MKC share price. Hence,

the recent c.10% decline in MKC shares since we last updated our Unilever estimates

(see Q126 sales and 15 questions for management) rather matters.

As a consequence, we revise our FY27e/FY28e EPS by c.(2)%

To ensure that our forward estimates (FY27e and beyond) are focused on the implicit

value of the remain co. we incorporate the proposed RMT by effecting a technical

share buyback (which is akin to the Reverse Morris Trust and an accompanying share

consolidation). Keeping this in mind, updating for a MKC share price of USD45.6

(closing price 13-05-26), we revise our FY27e/FY28e Unilever EPS by c.(2)% (see the

figure below):

Figure 1: Summary of our EPS revisions

FD adj. EPS (EUR)

FY26e FY27e FY28e

Revised 3.21 3.06 3.43

Previous 3.21 3.11 3.49

Variance (%) 0.0% -1.7% -1.8%

Source: BNP Paribas Equity Research estimates

We revise our Unilever TP from GBP48.7 to GBP47.9

We have previously argued (see Q126 sales and 15 questions for management) that

Unilever should be valued on c.18x FY27e EPS.