BNP Paribas Downgrades Unilever to Neutral Amid Slowing Growth Outlook

BNP Paribas has downgraded Unilever PLC (UL) from Outperform to Neutral, signaling a more cautious stance on the multinational consumer goods company. The decision follows a review of Unilever’s latest financial results and strategic execution, particularly in key emerging markets where volume growth has lagged. The bank highlighted a 3.2% decline in organic sales growth in the third quarter of 2025, below the 4.5% growth rate reported in the same period the prior year. The downgrade comes as Unilever reports adjusted operating profit growth of 2.1% in 2025, down from 6.8% in 2024. Despite ongoing cost optimization efforts, including the restructuring of its North America business, the company’s core margin expansion has stalled, with gross margins declining 110 basis points year-on-year. BNP Paribas noted that inflationary pressures and competitive intensity in categories like personal care and home care have constrained pricing power. Unilever’s stock, trading at €46.80 as of January 14, 2026, reflects the market’s sensitivity to the revised outlook. The downgrade impacts investor positioning, particularly among funds that track BNP Paribas’ equity recommendations. The shift may also influence broader sentiment toward consumer staples, a sector already under pressure from macroeconomic headwinds. The update underscores a broader reassessment of growth sustainability in consumer-facing businesses, with analysts now focusing on execution discipline and category-specific resilience. Unilever remains a major player in over 190 markets, but its ability to deliver consistent top-line and bottom-line improvement appears to be under increasing scrutiny.