Unilever Shares: Deutsche Bank Upgrades to Buy as a Hedge Against AI Risk

Deutsche Bank upgraded Unilever (LON: ULVR) to Buy from Hold and nudged its price target up to 5,350 pence from 5,300 pence, saying the consumer goods giant offers investors a way to balance exposure to AI-related volatility.

The bank said that, at a time of structural headwinds across the consumer staples sector, Unilever “offers a balance of longer-term transformation potential, near-term earnings confidence, and liquidity benefits to hedge AI risk in a balanced portfolio.”

The new target implies about 9% upside from Wednesday’s close of 4,916 pence. Unilever shares fell 0.5% on the day and are up 1.3% so far this year.

The upgrade comes as investors have rotated toward more defensive sectors amid the recent sell-off in AI-linked stocks. Large, easily traded companies such as Unilever can offer some stability during periods of market turbulence.

Wall Street has been mixed on consumer staples. In October, TD Cowen trimmed its Unilever price target to $74 from $76 while keeping a Buy rating. At the time, it said risk/rewards across large-cap staples remained unfavorable despite many trading near five-year lows, as big food companies lacked a clear path back to growth.

Unilever is in the process of selling most of its food business to McCormick. The UK Competition and Markets Authority said Wednesday that it has “decided, on the evidence currently available to it, that it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”

The regulator added that the merger will now be referred for an in-depth, phase 2 investigation unless the companies are able to address the competition concerns.