Shares in FTSE big Unilever (LSE: ULVR) have finished very well. Over the past three months, they’ve risen about 20%.

Wouldn’t it be loopy to purchase extra shares for my portfolio after this double-digit achieve? I don’t suppose so. Listed below are three the reason why.

Unilever’s traded greater earlier than

Whereas Unilever shares are presently close to 52-week highs, they’ve traded at a lot greater ranges earlier than. Again in September 2019, for instance, the shares had been altering arms for round 5,250p. That’s about 17% greater than the present share price.

Now, Unilever’s revenues have climbed considerably since then. For 2019, income got here in at €52bn. This yr, analysts count on €61bn.

This leads me to consider there’s potential for additional features right here.

Earnings might be set to leap

One more reason I’m bullish on Unilever is that the corporate has a brand new administration crew in place and is actually targeted on effectivity. As an example, a current report claimed that the corporate is ready to chop a 3rd of workplace jobs in Europe.

This concentrate on effectivity shouldn’t be ignored. For a begin, it may result in a lot greater income, particularly when mixed with decrease prices (as a result of truth inflation’s falling).

Secondly, a concentrate on effectivity can result in an enormous change in sentiment in direction of a inventory. For instance, when Meta Platforms and Amazon launched effectivity drives, their share costs exploded.

The dividend yield’s engaging

Lastly, I believe Unilever’s rock-solid dividend (which presently presents a yield of about 3.4%) may come again into focus now that rates of interest are more likely to fall.

When charges had been low, Shopper Staples shares with engaging dividends did very well. Buyers noticed them as ‘bond proxies’.

Nevertheless, lately, these shares have misplaced a few of their attraction as buyers have been in a position to receive excessive yields from bonds.

Now that charges are more likely to come down, I wouldn’t be shocked to see capital circulation again into Unilever and different Shopper Staples shares for his or her rising dividends (pushing share costs throughout the sector greater).

Potential for engaging returns

Now, there are dangers with Unilever shares, after all. After the current bounce within the share price, the valuation right here’s fairly excessive. At the moment, the forward-looking P/E ratio‘s 19, falling to 18 using next year’s earnings forecast.

These multiples don’t depart a whole lot of room for error. If near-term gross sales or earnings had been to come back in under forecasts (as a consequence of shoppers switching to cheaper manufacturers, for instance), the share price uptrend right here may come to an abrupt halt.

Total although, I believe the shares have attraction. I’m severely tempted to purchase extra.

It’s price noting that analysts at JP Morgan just lately put a price goal of 5,100p on the shares. If that concentrate on was to come back to fruition over the subsequent 12 months, I might be complete returns of round 17% when dividends are factored in.