Meristem Recommends ‘BUY’ on Unilever Nigeria with ₦162.35 Target Price

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Unilever Nigeria Plc delivered a resilient revenue expansion for the first half of 2026, with turnover rising +22.24% year-on-year to ₦119.92 billion (up from ₦98.10 billion in H1 2025).

Following the release of the scorecard, equity research analysts Modupe Arinde and Temiloluwa O. Oyenuga at Meristem Securities issued a “BUY” recommendation on the stock, placing a full-year 2026 target price of ₦162.35 per share—reflecting a +23.56% upside potential over its reference closing price of ₦131.40.

Growth across the consumer goods manufacturer’s operations was led by its anchor Food segment, which grew +31.31% YoY to ₦77.05 billion, while Beauty & Wellbeing expanded +21.00% YoY to ₦11.90 billion. The Personal Care segment delivered a modest +4.68% YoY gain. Topline expansion was anchored by volume gains, disciplined product pricing, and distribution execution across retail channels.

For the full year 2026, Meristem projects total revenue to grow +24.44% YoY to ₦266.68 billion, supported by household brand affinity, route-to-market investments, and broad product availability.

Cost Management vs. Operating Expense Pressures

• Gross Margin Expansion: Despite direct input cost pressures, revenue growth outstripped cost of sales growth (+16.43% YoY to ₦65.18 billion). Consequently, Unilever’s cost-to-sales ratio declined to 54.36% (from 57.07%), lifting gross margin by 271 basis points to 45.64%.

• Elevated Brand & Logistics Outlays: Operating expenses surged +29.80% YoY to ₦31.16 billion, driven by heightened marketing expenditure and a +58.82% jump in selling and distribution expenses due to fuel and logistics costs. Nevertheless, operating margin edged higher to 20.31% (from 19.18% in H1 2025).

Finance Costs and Tax Drag Temper Bottom-Line Growth

While operational…