Exane finds little appeal in 'cheap' staples for 2026, cuts Unilever

HALEON

08/01/2026 12:46

** Exane BNP Paribas expects European staples to remain "cheap" but warns that structural challenges leave little reason for optimism about the sector in 2026

** "As consequence, barring a material retreat of the AI trade and/or a material macro shock, we see little in either valuation and/or 2026 growth tendencies that sparks excitement," it says

** It cuts Unilever ULVR.L to "neutral" from "outperform" estimating the group will post around 4% LFL sales growth in FY 2026, which it believes will not encourage a re-rating

** It also downgrades Swedish hygiene products maker Essity ESSITYa.ST to "neutral" from "outperform" with negative pricing likely to drive a lucklustre LFL growth sales in FY2026

** On the other hand, it upgrades Puig Brands PUIGb.MC to "outperform" from "neutral" saying the Spanish beauty company's valuation is "inexpensive"

** "We see scope for a material share buy back," the broker adds, flagging also that a CEO change is loooming

** Exane says it favours consumer health sub-sector, noting that both Haleon HLN.L and Reckitt's RKT.L LFL growth sales should drive re-rating

** It sees L'Oreal OREP.PA and Lotus Bakeries LOTB.BR as its key "underperform" names, pointing to Galderma acquisition for the former and downside to consensus revenue for the latter

 (Reporting by Tiago Brandao)

 ((Tiago.Brandao@thomsonreuters.com;))