Key Takeaways
- Fernando Fernandez is pushing to streamline the global consumer goods business.
- The company recorded a drop in pretax profits in its first half year results.
- New CEO Fernandez is pushing to refocus Unilever on personal care and beauty brands over food.
Unilever’s ULVR stock price performance has been lackluster so far this year. Shares in the consumer goods giant are largely unchanged year to date, well behind the Morningstar UK Index’s 15% gain.
At around £46, Unilever stock is currently trading way below the heights it reached in September 2019 when its shares peaked at £51.90. But all eyes are on whether its new CEO, Fernando Fernandez, can turn things around.
Fernandez, who took over in March 2025, is already reshaping the consumer goods group’s strategy, including a pivot away from food into higher-growth beauty and personal care products. The company is undergoing a transformation that already saw 6,000 jobs lost in the first quarter of 2025.
Described by one high-profile fund manager as “dynamite,” investors will be hoping that Fernandez will execute a swift turnaround and deliver value.
Can Unilever’s Fernando Fernandez Deliver for Investors?
Morningstar equity analyst Diana Radu says Fernandez’ leadership style is rooted in his early experience in Argentina at the start of his career with Unilever, back in 1987, an era that saw high inflation and economic volatility in the South American country.
“I get a sense that he lacks patience with underperformance and mediocrity, which is different from past CEOs. He is addressing all the underperformance and the cultural issues at Unilever to make it a performance machine,” she says.
Fernandez replaced Hein Schumacher, who was ousted after just 18 months in the role.
Unilever Earnings: Reported Losses Despite Turnaround Strategy
At the half-year stage Unilever reported a fall in pretax profits to EUR 5.09 billion from EUR 5.56 billion.
However, underlying sales growth hit 3.4%, an improvement on the 2024 half-year results.
The group has been steadily scaling back its EUR 13.4 billion food division. It now plans to spin off its EUR 15 billion ice cream arm in an Amsterdam listing.
For Kunal Kothari, fund manager of the Neutral-rated Aviva UK Listed Equity Income Fund, the strategy signals a shift in priorities to focus on premium personal care products.
“They’ve said they want to lift premium from 30% of revenue to up to 50% over time. The emphasis for Unilever is going to be less on selling average products to low-income consumers and it’s going to be more about innovating, creating brands, and creating categories for premium consumers,” he says.
Unilever’s Top Brands: Vaseline and Dove
In Unilever’s first-half results, Vaseline and Dove saw double-digit growth. Morningstar’s Radu says both brands are central to Unilever’s turnaround story.
In the first half of the year, its beauty & well-being business saw underlying sales up 3.7%, with Unilever’s well-being brands offsetting weaker growth from beauty. Its personal care division also saw sales up 4.8%, with its Dove range growing in the high-single digits.
Radu says Unilever is using social media to refresh the 150-year-old Vaseline brand.
Unilever is also betting on male grooming becoming a key growth driver within personal care, with the acquisition of US brand Dr. Squatch for USD 1.5 billion in June. “Male grooming is an exciting area for Unilever because innovation in that space has not been on par with the women’s side,” Radu says.
Aviva’s Kothari also believes that Unilever stands to benefit in the longer term from rising sales of its premium products to health and image-conscious consumers in the US and India.
Unilever Stock: The Bear Case
Unilever still faces significant challenges, however. The group operates in a fiercely competitive sector, in which consumers are increasingly turning to local and niche brands.
Radu also cautions that while its emerging markets footprint should deliver long term growth, it also leaves Unilever exposed to near-term volatility, particularly from currency swings.
Fernandez’ turnaround plan, which also includes higher marketing and innovation spending, could weigh on margins if volume gains or premiumization fail to offset rising customer acquisition costs, she adds.
Fund Managers Who Hold Unilever Stock Make The Bull Case
Columbia Threadneedle’s Jeremy A. Smith, head of UK equities and fund manager of CT UK Growth & Income Fund, CT UK Equity Income Fund, and the CT UK Equity Alpha Income Fund, is confident that Fernandez’ long experience at the company will help him get the business back on track.
“It’s a very complex business and [to run it] you have got to understand how it works, how decisions are made, and what motivates people. It’s very difficult as an outsider to have that intricate level of knowledge,” he says.
Another high-profile fund manager holding Unilever is Nick Train, manager of the Finsbury Growth and Income Trust FGIT, which has a Morningstar Medalist Rating of Bronze. The company makes up nearly 10% of the investment trust’s portfolio.
Unilever is also one of the top 10 holdings of star fund manager Terry Smith’s Bronze-rated Fundsmith Equity fund. In February, Smith described Fernandez, who was then Unilever’s CFO, as “dynamite.”
Smith said of the chief executive: “Nobody ever achieved anything by being reasonable. He really is quite a talent.”
Is Unilever Stock a Buy, Sell, or Hold?
Morningstar’s Radu maintains a fair value estimate of £49.40 on Unilever stock, which is trading at £45.44 as of Sept. 17. It has a 4-star rating, meaning the stock is undervalued.
She says the group has a wide economic moat, driven by the strength of its brands and cost advantages, and she argues that Unilever’s extensive emerging markets footprint differentiates it from rivals, seeing it as an advantage that can boost volumes in the long-term.
