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(Sharecast News) - Berenberg lowered its target price on consumer goods giant Unilever from 58.40 to 50.40 on Friday following the group's first quarter sales figures a day earlier.
In Q1, Unilever saw group underlying sales grow 3.8% year-on-year, above consensus estimates of 3.6%, driven by pricing of 0.9% and volume/mix growth of 2.9%.
Berenberg highlighted that Unilever's beat was driven by its home care division, which saw "strong performance" in two key markets - India and Brazil. In its other three divisions - beauty and wellbeing, personal care and foods, underlying sales growth was "slightly below consensus expectations".
However, the German bank noted that while the stock's valuation was "undemanding", a sustained re-rating in the near term could be inhibited by the pending foods division merger with McCormick, expected to be completed around mid-2027.
"Furthermore, the ongoing Middle East conflict and its inflationary effect on oil-related costs poses a risk to Unilever's growth, particularly in the emerging markets, which account for circa 60% of group sales," Berenberg said.
"Our FY26 EPS forecasts are 0.8% higher than our previous estimate, mostly driven by more favourable currency trends. Our DCF-based, 12-month price target falls to GBP50.40 (from GBP58.40) as we raise our WACC assumption from 7.9% to 8.6% to reflect the recent rise in bond yields and risks highlighted above."
Analysts at Canaccord Genuity upgraded motoring and cycling products retailer Halfords from 'hold' to 'buy' on Friday following the group's "better-than-expected" second half trading performance.
Canaccord Genuity, which also hiked its target price on the stock fom 156p to 170p, said Halfords H2 trading update had prompted it to upgrade its FY26 adjusted pre-tax profits forecast by 6% to 39.5m.
While the Canadian bank noted that full financial and operational detail would not be provided until June, it feels that Halfords' new leadership team's strategy was already gaining traction with "positive results starting to materialise".
Looking ahead, Canaccord noted that despite ongoing geopolitical uncertainty, Halfords' trading across March and April had been in line with expectations, with the majority of FY27 energy costs and FX requirements hedged. As a result, management indicated that it was comfortable with current FY27 consensus expectations for adjusted pre-tax profits of 42m to 48.6m.
"With the strategy starting to gain traction, we believe now is the right time to turn more positive on the shares and move to 'buy' from 'hold. Our target price increases to 170p from 156p, based on a CY26E target PER multiple of c.11x (in line with the long run average), providing upside of c.17% or c.23% on a total return basis," said Canaccord Genuity.