Just a few years ago, this FTSE 100 growth stock was considered the ultimate no-brainer buy. Then suddenly it wasn’t. Is the cycle about to swing back in its favour?

The company in question is consumer goods giant Unilever (LSE: ULVR). For years, it was viewed as a top portfolio building block, offering both steady growth and rising income. The shares delivered, and so did the dividend.

Unilever looked reassuringly expensive. The price-to-earnings (P/E) ratio hovered around 24, while the yield sat at a modest 2%–3%. That felt acceptable given its track record of regular increases. And then it went wrong.

A decade of FTSE 100 drift

Some date its troubles to 2017, when Kraft Heinz made an unsolicited £115bn bid. It was swiftly rejected, but exposed weaknesses over Unilever’s strategy, structure and direction. Its vast portfolio of brands, which ranged from Hellmann’s to Vaseline and Dove, seemed to lack focus. Moves to define a broader social mission for its products drew a mixed response.

Boardroom tensions, pressure from activist investors and a long-running debate about whether the group should be broken up killed the vibe. Hedge fund investor Nelson Peltz joined the board in 2022 and pushed for sharper execution and disposals. Progress has been patchy.

The pandemic disrupted operations, then the cost-of-living crisis squeezed consumers. The shares are down 10% over 12 months and up a meagre 3% over five years. At today’s 4,594p, they’re trading at levels seen seven or eight years ago.

New chief executive Fernando Fernández promised a reset, lifting the mood. Spinning off the ice cream arm into The Magnum Ice Cream Company looked sensible, reducing seasonality and slashing refrigeration bills.

Share price recovery remains on ice

Full-year results on 5 February were patchy. Underlying operating profit slipped 1.1% to €10.1bn. Net profit jumped to €9.47bn from €5.7bn though, helped by disposals. The €1.5bn share buyback was welcomed. But the board warned that 2026 sales growth will be at the lower end of its 4% to 6% range, and the shares fell.

Kraft Heinz appears to have revived its interest, exploring a targeted tie-up between the two firms’ food divisions. Unilever is also examining other options. A deal could simplify the group and allow it to focus on faster-growing beauty and personal care lines.

On the other hand, its food brands do generate reliable cash. Finding a buyer at the right price may also prove tricky given current market turmoil.

Valuation and uncertainty

If oil and gas prices surge that will drive up transport and production costs, while squeezing consumers even further. The Unilever share price has fallen 14.5% in the last month, roughly double the FTSE 100’s decline.

Despite its troubles, this is still a £100bn company. The P/E now stands at a more modest 17.2, althought it’s still not cheap. The yield has edged up to 3.75%. That looks more appealing, but there’s massive uncertainty here. I certainly wouldn’t use the phrase no-brainer buy today. Investors might consider Unilever as a long-term recovery play, but they may find a cheaper entry point if today’s volatility continues.