12 February 2026
If you are covering either of Unilever’s or BAT’s latest financial results, please find below a comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
Unilever
“Unilever produced a solid set of results, but its guide is what has disappointed, coming in at the lower end of its medium-term expectations. The share price has had a decent run coming into these results, but is off today, suggesting that investors are looking to take stock and see how the picture develops following that disappointing guidance.
“The good news for Unilever is that its revenue growth is nicely balanced between volume and pricing. Furthermore, emerging markets continue to drive much of the good performance, with China and Indonesia stabilising after a difficult period and giving it a good base to kick on from. That said, cost of living pressures continue to impact in developed markets and while the consumer is doing ‘okay-ish’ it is far from firing on all cylinders and that will impact the branded goods sector.
“Furthermore, Unilever is now adjusting to life without its ice cream business having spun out Magnum. It says that food business is doing well, but even after selling Magnum it still has a huge division which is dragging on overall performance of the group. We will see how that transition plays out, but further simplification should not be ruled out.
BAT
“BAT’s results were okay but unlikely to set the world on fire. This time last year BAT was one of the cheapest stocks out there, generating good cashflows and rewarding shareholders handsomely. The valuation has since had a 50% re-rating, and while still delivering those strong cashflows, it is now much more reasonably valued.
“BAT, however, is finding growth in the right places just now. While cigarette volumes decline, and pricing continues to drive revenues, the company so an acceleration of its transition products in the second half of the year, growing double digits in that period. Much of this growth was from nicotine pouch sales in the US, up over 300%, where they are taking market share. As such, the company is getting that balance right between the old world and new one.
“BAT is still a very profitable business with a solid share buyback scheme, meaning despite the increased valuation it is still a good company to own for those investors that are happy to do so.”
