Shares of Hindustan Unilever Ltd. fell 4% in early trading on Thursday, October 24, after the company’s September quarter results, where weak macro-economic factors impacted the performance.
While the Home Care business grew above expectations, the beauty revenue was in-line, but the personal care and Food & Refreshments business declined, contrary to expectations of growth.
The company will also separate its ice cream business and the mode for the same will be communicated by the end of the year.
Brokerage firm JPMorgan has maintained its “overweight” rating on the stock but cut its price target to ₹2,870 from ₹2,950 earlier. It wrote in its note that slowing urban demand casts a shadow on near-term demand outlook.
As a result of the volume growth miss, JPMorgan has lowered its financial year 2025 and 2026 Earnings Per Share (EPS) estimates by 3% each, on the back of marginal moderation in revenue forecasts.
Jefferies has maintained its “buy” rating on HUL with a price target of ₹3,130. It said that rural continues to recover but urban demand is starting to moderate.
It expects the current demand trends to continue in the near-term, except for some boost from product pricing.
Morgan Stanley remains “underweight” on HUL with a price target of ₹2,110. It believes that Personal Care, whose revenue declined during the quarter and Foods & Refreshment (F&R) category remain an overhang to HUL’s growth.
It is expecting a low single-digit price growth in the third quarter at current levels of inflation in tea and palm oil.
Out of the 43 analysts that have coverage on HUL, 24 of them have a “buy” rating, 14 say “hold”, while five have a “sell” rating.
Shares of HUL are trading 3.8% lower at ₹2,558.
Content retrieved from: https://www.cnbctv18.com/market/hindustan-unilever-hul-share-price-fall-post-q2-results-volume-miss-estimate-cut-19498072.htm.
