Why Did Analysts Give Unilever PLC (UL) a Buy Rating?

We recently compiled a list of the 11 Best Ice Cream Stocks to Invest In 2024. In this article, we are going to take a look at where Unilever PLC (NYSE:UL) stands against the other ice cream stocks.

Regarded as the most favorite dessert globally, ice cream has its popularity game quite high in the U.S. as well, where it leaves an impact of a massive $11.4 billion every year, while, at the same time, giving out $1.9 billion in direct wages, according to IDFA! Also, the U.S. saw 1.3 billion gallons of ice cream getting produced in the country in 2023, showcasing the dessert’s staggering popularity in the country. For all the ice cream lovers, we have also curated a list which you can view to see all the best ice cream brands in the U.S. so that you can fulfill all your ice cream cravings in the best way!

In addition to this, average per capita consumption in the country amounts to over 4 gallons every year, and with a huge population of 341 million, that’s quite a lot of consumption! In terms of consumption, New Zealand, the U.S., and Australia are the 3 countries that top the charts, with per capita annual consumption rates of 28.4 liters, 20.8 liters, and 18.0 liters, respectively!

As such, the global ice cream industry is racing quickly toward the sky, as, after sitting at the $76.1 billion mark in 2023, it’s on its way to hitting $132.3 billion in 2032. That boasts a CAGR of 6.7%, which is quite staggering, according to Fortune Business Insights. Ice cream-making giants like Ben & Jerry's, Wall’s, Magnum, to name a few, dominate the global ice cream industry with a market share of 20%.

Also check out 15 largest Ice Cream Companies in the World.

Moving on to recent shifting trends of the industry, one interesting trend that has emerged related to flavors, wherein, plant-based and vegan ice creams are growing in popularity. As reported by Straits Research, the global vegan ice cream market size is expected to expand from its market size figure of $623.63 million in 2022 to $984.16 million by 2031, boasting a CAGR of 5.2%. Furthermore, ice creams are planned to be given a new touch by the makers by bringing in the element of spice in ice creams! Crazy, right? In Germany, it is reported by Tetrapak that 34% of ice cream consumers are keen on trying out ice cream flavors with spice in them.

With these innovations emerging, the global ice cream industry is expected to generate over $100 billion in the coming decade, and with the given demand stats we discussed above, it’s quite certain how the ice cream market is one to look at in 2024 and the coming years. Hence, here we are going to discuss 11 Best Ice Cream Stocks to Invest In 2024 so that one can capitalize on the booming times to come in the ice cream industry.

Methodology

To curate our list of 11 Best Ice Cream Stocks to Invest In 2024, we gathered a list of all companies with a significant presence in the ice cream industry. We then further narrowed down on the basis of their upside potential and ranked the finest remaining companies by their number of hedge fund holders as of Q1, 2024, using Insider Monkey's database that tracks the activity of 920 hedge funds. For stocks with equal number of hedge fund holders, we used their upside as the tiebreaker.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A supermarket shelf overflowing with a variety of fast-moving consumer goods.

Unilever PLC (NYSE:UL)     

Number of Hedge Fund Investors’ holdings: 20

With brands like Horlicks, Knorr, Magnum, The Vegetarian Butcher, Wall’s, Ben & Jerry’s, and Hellmann’s under its belt, Unilever PLC (NYSE:UL) is a leading consumer goods manufacturer. It produces and sells a range of products including ice creams, affordable soaps, luxurious shampoos, and everyday household care products.

The company’s solar energy initiatives in its warehouses mean a bright outlook for its ice cream businesses for most of the rest of 2024, while the sun shines bright in regions of Pakistan, Turkey, and Mexico; for instance, this period results in cost-cutting of $205,675 every year in its Izmir warehouse in Turkey alone.

Analysts have their eye on a price target of $56.59 from its current price of $55.59, which is an upside of 2%; also, the price target of the analysts goes as high as $66.13 which might also be the reason why nine analysts are of the “buy” opinion, while six are of the “hold” opinion. From Insider Monkey’s database of hedge fund investors, 20 hold an interest in the company’s stock, with their holdings' combined value standing at $952.5 million, indicating why one should consider this stock.

With underlying sales growth of somewhere between 3% and 5% already predicted by the company earlier in the year, it recorded Underlying Sales Growth (USG) of 4.4% for the latest quarter, ending 31 March 2024. The ice cream segment, on the other hand, produced underlying sales growth of 2.3%, with a turnover growing from $1.84 billion in the first quarter of 2023 to $1.95 billion in the current quarter!

Overall UL ranks 8th on our list of the best ice cream stocks to buy. You can visit 11 Best Ice Cream Stocks to Invest In 2024 to see the other ice cream stocks that are on hedge funds’ radar. While we acknowledge the potential of UL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.