Are Unilever Shares (ULVR.L) Set For A Breakout? One Analyst Says Yes

After a 12 month period of relatively rangebound trading, Unilver share price (LON: ULVR) now trades close to the 52 week high, and according to one analyst, could be set for a big push over the next 12 months.

In a recent update, Barclays has raised its target price for Unilever shares from 5,000p to 5,200p following strong first-quarter results reported by the consumer-goods giant. The multinational’s performance has prompted the bank to maintain an ‘overweight' rating on the stock, identifying Unilever as presenting the most compelling turnaround among European staple consumer goods companies.

Unilever's commendable first-quarter results, which were unveiled last month, showcased an underlying sales growth of 4.4%. This growth was evenly spread across all five of the business’s divisions. These results have clearly made an impression on financial analysts and investors alike, affirming the company’s success in implementing its strategic business objectives.

Not only has Barclays increased its target price for Unilever, but it has also adjusted its estimates for the company's financial performance. Revising upward its projections for Unilever's revenue, margin, and earnings per share is a testament to the bank's belief in Unilever’s continued robust fiscal health.

Following the first-quarter update (25th April) Unilever’s share price has seen a substantial increase of over 11%, firmly breaking out of the trading range between 3700p and 4100p. The level of the upward revision in price target reflects a mark the firm has not been close to since 2019, and will require solid operational execution to deliver over the prevailing periods.

Even with these fluctuations, Unilever's outlook for the full year remains unchanged. The company continues to project an underlying sales improvement of between 3-5%, accompanied by a ‘modest improvement' in its underlying operating margin. Barclays’ recent actions indicate confidence in these projections, as it considers the trajectory that Unilever is on – transitioning into a high-growth and high-margin business – and the influence these factors could have on future financial performance.

As the market continues to evaluate Unilever's strategic direction and its impact on the company's valuation, Barclays' increased target price represents a positive outlook on Unilever’s efforts to reposition itself. With a clearly unchanged full-year expectation and acknowledgment from one of the leading banks, Unilever's journey of reshaping its business while delivering shareholder value seems to be on a promising path.