Nestle

Note: This is a daily stock update and the information stands true as of 13/02/25, 09:00 CET.

Company update:
Sales came in slightly better than expected, with organic growth at 2.2%, just above our 2.1% forecast and the consensus estimate of 2%. Margins were in line with consensus, but FCF was stronger than expected at CHF10bn (vs. expectations of CHF9.5bn).

Outlook 2025 The EBIT margin is expected to exceed 16% (consensus at 16.2%, AlphaValue at 16.5% already). Cost savings will reach CHF300m in 2025.

Outlook 2027 The company reiterated its target of EUR2.5bn in annual cost savings by 2027 but disclosed higher-than-expected restructuring costs.

Expert opinion: 
Our analyst believes the market will focus on these higher restructuring costs, making it too early to jump back in despite a positive rating and 17% upside. We are slightly more optimistic. The stock has seen a significant decline over the past few years and now trades at the lower end of its historical PE25 range (see graph below). While we do not expect a rapid rebound, the small topline beat is a positive signal. We believe the consensus downgrade cycle has now ended, and given the company’s fundamentals, the stock should eventually regain market favor.

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