Unilever (LON: ULVR) share price popped on Thursday after the blue-chip company unveiled strong financial results. The stock surged by more than 3% in London and the trend is expected to continue in New York when the market opens. It jumped to a high of 4,018p, 10% above its lowest point this year.

Unilever, the giant consumer brand, has gone through a period of turmoil in the past few years. In this period, the company has battled strong competition, dealt with surging raw material prices, and became a target for investors opposed to ESG issues. As a result, Unilever shares remain 12% below their all-time high and have underperformed the S&P 500.

There are signs that Unilever’s turnaround is bearing fruit now. Results published on Thursday revealed that the company was doing better than expected. All its divisions, including beauty, personal care, home care, nutrition, and ice cream, recorded strong sales growth in the last financial year. 

Total turnover surged to €59.6 billion while the operating profit rose to €9.8 billion. The fourth-quarter turnover came in at €14 billion, higher than what analysts were expecting. As a result, the company will now start implementing a €1.5 billion share buyback in Q2. Share repurchases are usually a way of returning funds to shareholders because they reduce the share count and help to boost the earnings per share (EPS).

There are a few reasons why Unilever will likely continue to do well in the coming months. First, there are signs that global inflation is coming down. The impact of this is that it will lead to more consumer spending now that wages in some key countries is rising. 

Falling inflation will also help Unilever boost its profits by lowering the cost of doing business in its key manufacturing hubs around the world. Further, it is worth noting that Unilever owns some of the most popular brands around the world like Sunlight, Omo, Rexona, and Dove.

Most importantly, because of the recent woes, Unilever is one of the most undervalued blue-chip companies. Data shows that it is trading at a forward PE multiple of 18, lower than the sector median of 20. Its forward EV to EBITDA is 11 also lower than the sector median of 13.

The other potential catalyst for the Unilever stock price is based on technicals. As shown above, the stock has risen in the past three straight weeks and now sits at its highest point since September last year. Unilever has soared above the 200-day and 50-day moving averages and formed a big gap. In the gap and go strategy, this is usually seen as a bullish catalyst for an asset.

Therefore, the outlook for the ULVR stock price is bullish, with the near-term target being at 4,170p, its highest swing on July 25th. If this happens, the shares will need to rise by almost 4% from the current level.

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