UBS slashed its ratings on Unilever (UN), Cadbury (CBY), and Group Danone (GDNNY) amid concerns over valuation and slowing sales in emerging markets. UBS believes that growth in emerging markets will not offset poor margins in developed countries:
We believe there is a high risk of a disproportionate share price reaction to any earnings revisions, particularly if they are emerging market related, as the perceived growth opportunities there have been a primary reason for the sector’s multiple expansion over the last four years.
UBS downgraded Unilever (UN) from Neutral to SELL.
UBS downgraded Cadbury (CBY) from Neutral to SELL.
UBS downgraded Group Danone (GDNNY) from Neutral to SELL.
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