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

About this update from Puig Brands, S.a. Class B

** 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 LSE:ULVR 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 OMXSTO:ESSITY_A 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 BME:PUIG 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 LSE:HLN and Reckitt's BX:3RB LFL growth sales should drive re-rating ** It sees L'Oreal EURONEXT:OR and Lotus Bakeries EURONEXT:LOTB as its key "underperform" names, pointing to Galderma acquisition for the former and downside to consensus revenue for the latter

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