CardinalStone, an investment management firm, has set a 2025 target price of N54.99 for UNILEVER, revising its net income forecast upward by 18% alongside stronger revenue expectations.
This update is contained in an equity research report titled “Earnings Upside on Operational Improvement” published on May 28, 2025.
According to CardinalStone, Unilever Nigeria Plc shares are expected to rise by 19.5%, from N46.00 to N54.99, supported by stronger earnings, better cost management, and improved cash flow, all of which are likely to strengthen investor confidence.
As detailed in the report, analysts revised their earlier net income estimate from N21.2 billion to N24.9 billion, citing increased revenue projections and higher sales volumes, particularly in the food segment.
On cost efficiency, the report highlighted projected savings in the cost of goods sold, supported by reduced foreign exchange and inflationary pressures.
- Hence, analysts now forecast a reduced cost-to-sales ratio of 61.0%, compared to 63.1% in 2024.
CardinalStone also anticipates that Unilever will close 2025 with a stronger cash position, driven by solid operating performance and improved finance income.
Regarding dividends, the report noted: “We see room for an increase in dividends paid to N7.2 billion, compared to the FY’24 dividend of N1.25 per share.”
Reduced FX volatility
One key point analysts highlighted is the expected drop in the cost-to-sales ratio, supported by a more stable foreign exchange rate and lower inflation expected in FY 2025.
A recent report by Nairametrics highlights a significant reduction in net FX losses among leading Nigerian companies, which dropped by an impressive 98% year-on-year, from N1.17 trillion in Q1 2024 to N22.2 billion in Q1 2025.
- The report assessed 10 companies, including six consumer goods firms, a sector to which Unilever Nigeria Plc belongs.
This decrease reflects a more favorable macroeconomic environment, where costs for raw material procurement and servicing foreign currency debt are expected to stabilize further.
Such improved conditions likely contributed to the strong performance of consumer goods companies in the Nigerian stock market during the first quarter of 2025.
Market trend
UNILEVER has enjoyed strong positive momentum in 2025, delivering a year-to-date return of 39.61% in the Nigerian stock market.
- It stands among other top performers like Honeywell Flour Mills, Champion Breweries, Nestle Nigeria, Nigerian Breweries, International Breweries, and Cadbury, all posting gains above 35%.
- The NGX Consumer Goods Index, which tracks the price movements of consumer goods companies, has recorded a solid 36.82% gain year-to-date so far.
With favorable macroeconomic conditions already present, Unilever might meet or even exceed the projected price of N54.99.
