The FTSE 100-group wants to restore its operating margins back up to 20% come 2020, while it is also looking to make €6bn in cost savings by then.
Last week, Unilever reported that its underlying operating margin rose 80 basis points to 18.6% as it trimmed its cost base.
Liberum is upbeat and has upped its price target to 4,200p (from 3,960p) over what it sees as progress towards the 2020 goals, although it’s still not the biggest fan of the stock, maintaining its ‘hold’ recommendation.
“We forecast acceleration in 2H organic sales growth to 3.6% as one-off factors drop out, yet this implies only c.3% organic sales growth in 2018,” read the note to clients.
“Underlying margin progress of 50bps in 2018 and the second tranche of the €6bn share buyback underpin our forecast for 4.5% 2018E EPS growth.”
Unilever shares are up 0.5% to 4,305p in late morning trading.