Unilever Share Price Forecast: Will This Momentum Stick?

Summary:
• What is the outlook of the Unilever share price after the company published strong results? We explain what to expect in the near term.

This week, the Unilever share price soared after the company published strong quarterly results. The ULVR stock jumped to a high of 3,675p in London and $47 in the United States. This means that the shares have jumped by over 12% from its lowest level in March this year. Other consumer staples stock have also done well even as inflation jumped.

Unilever earnings review

Unilever had a relatively good quarter even as the cost of doing business rose. In its statement, the company said that its sales growth rose by 7.3% as it increased its top products’ prices. However, its volume of goods sold declined by 1%, while its turnover rose y 11.8% to 13.8 billion euros. Most importantly, the firm started buying back its shares. As a result, it bought the first tranche of its 3 billion euro buyback in the first quarter.

In this earnings season, consumer brands have demonstrated that they have strong purchasing power. For example, Unilever’s home care solutions revenue rose by 9.2% because of price hikes. In addition, beauty and personal care revenue rose by 7.1%, while food and refreshments increased by 6.5%. The same trend happened in Procter & Gamble, whose management decided to increase prices to deal with the rising cost of doing business.

Still, the challenge for Unilever and other consumer groups is how much they will keep rising prices without hurting growth. At the same time, their benefit is that they can leave their prices higher even when the cost of doing business declines in the coming years.

Unilever share price forecast.

The ULVR share price has continued its bullish trend after it published encouraging results. This rebound was in line with my previous Unilever stock prediction. The stock managed to move above the key resistance level at 3,584p, which was the highest point on March 29th.

Unilever has also passed the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) has been in a strong upward trend. Therefore, there is a likelihood that the stock will keep rising as bulls target the key resistance level at 3,800p. Conversely, a drop below the support at 3,584p will invalidate the bullish view.