HUL shares jump as much as 8% after an upgrade from Goldman Sachs on better earnings hopes

Shares of Hindustan Unilever Ltd. have been upgraded by brokerage firm Goldman Sachs on Friday, August 1, after the company reported its June quarter results on Thursday. The stock jumped as much as 8% in response.Goldman Sachs has upgraded HUL to “buy” from its earlier rating of “neutral” and also raised its price target on the stock to ₹2,900 from ₹2,400 earlier. This is the first time that Goldman Sachs has issued a “buy” recommendation for HUL, since it initiated coverage on it in 2022 with a “neutral” rating. The revised price target implies a 15% upside from Thursday’s closing levels.
The brokerage wrote that HUL’s earnings growth is witnessing a turnaround driven by a combination of macro factors and internal initiatives. It is also hopeful that HUL’s revenue growth will accelerate to high-single-digit levels by the second half of the current financial year and in financial year 2027.
Once growth picks up, margins for HUL will also see an increase, driven by operating leverage on fixed costs and advertising spends, brokerage wrote.As a result, Goldman Sachs expects HUL’s Earnings Per Share (EPS) growth to accelerate to double digits over financial year 2026-2028, compared to the Compounded Annual Growth Rate (CAGR) of low-single-digits that it has showcased between financial year 2023-2026.

A sharp increase in input costs and a worsening of the macro environment for mass consumption are two key risks highlighted by Goldman Sachs to its upgrade of HUL.

Among the 43 analysts that have coverage on HUL, 29 of them have a “buy” rating on the stock, 11 say “hold”, while three others have a “sell” rating.

Shares of Hindustan Unilever are trading 3.3% higher on Friday at ₹2,605. The stock has risen 10% in the last one month.