Update shared on04 Sep 2025
Analysts have modestly reduced price targets for Nestlé, citing undervaluation but ongoing concerns over brand strategy, restrictive dividends, and persistent underperformance, leaving the consensus fair value unchanged at CHF86.23.
Analyst Commentary
- Valuation has become more attractive with Nestlé trading below 16x forward earnings and nearing decade-low levels.
- Persistent concerns remain about the company's compromised plans for rebuilding brand equity.
- Dividend commitment is considered restrictive, potentially limiting financial flexibility.
- Bearish analysts cite recent underperformance, leading to lowered price targets.
- Sentiment overall reflects downward revisions to price targets in light of weaker first-half results and ongoing structural challenges.
What's in the News
- Philipp Navratil has been appointed CEO of Nestlé effective September 1, 2025, following the dismissal of Laurent Freixe for breaching the company’s Code of Business Conduct due to an undisclosed relationship with a subordinate; Navratil is seen as likely to continue the existing strategic direction (Key Developments; Wall Street Journal).
- The past two years have been marked by executive departures and scandals at Nestlé, contributing to a persistent share price decline; the new CEO is under pressure to restore stability and investor confidence (Wall Street Journal).
- Speculation has resurfaced around PAI Partners seeking to sell its 50% stake in the Froneri ice-cream joint venture with Nestlé, with Goldman Sachs reportedly interested in the transaction that could value Froneri at €15 billion ($17.1 billion); Nestlé is expected to retain its stake (Financial Times; Key Developments).
- Nestlé has entered into a strategic partnership with Claro Enterprise Solutions to enhance connectivity and operational efficiency across 22 countries in Latin America and the Caribbean, implementing advanced technologies for improved network and centralized services (Key Developments).
- Despite ongoing challenges, Nestlé reaffirmed its full-year 2025 earnings guidance, projecting improved organic sales growth versus 2024 and maintaining its growth plans (Key Developments).
Valuation Changes
Summary of Valuation Changes for Nestlé
- The Consensus Analyst Price Target remained effectively unchanged, at CHF86.23.
- The Consensus Revenue Growth forecasts for Nestlé remained effectively unchanged, at 1.8% per annum.
- The Net Profit Margin for Nestlé remained effectively unchanged, at 12.48%.
Disclaimer
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