SWX:NESN

Stock Analysis Report

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Market Cap

CHF315.8b

Last Updated

2021/07/31 17:11 UTC

Data Sources

Company Financials +

Executive Summary

Nestlé S.A., together with its subsidiaries, operates as a food and beverage company. More Details


Snowflake Analysis

Established dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has Nestlé's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NESN is less volatile than 75% of Swiss stocks over the past 3 months, typically moving +/- 1% a week.

Volatility Over Time: NESN's weekly volatility (1%) has been stable over the past year.


Market Performance


7 Day Return

-0.7%

NESN

-0.3%

CH Food

-0.05%

CH Market


1 Year Return

6.2%

NESN

8.7%

CH Food

23.2%

CH Market

Return vs Industry: NESN underperformed the Swiss Food industry which returned 8.7% over the past year.

Return vs Market: NESN underperformed the Swiss Market which returned 23.2% over the past year.


Shareholder returns

NESNIndustryMarket
7 Day-0.7%-0.3%-0.05%
30 Day-0.7%0.2%1.5%
90 Day5.4%6.4%9.8%
1 Year9.0%6.2%11.3%8.7%26.6%23.2%
3 Year52.4%41.0%48.2%33.0%41.5%26.0%
5 Year68.9%47.0%63.1%29.3%70.1%39.3%

Long-Term Price Volatility Vs. Market

How volatile is Nestlé's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Nestlé undervalued compared to its fair value and its price relative to the market?

20.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NESN (CHF114.8) is trading below our estimate of fair value (CHF143.46)

Significantly Below Fair Value: NESN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NESN's PE Ratio (26.3x) is in line with the Swiss Food industry average.

PE vs Market: NESN is poor value based on its PE Ratio (26.3x) compared to the Swiss market (22.7x).


Price to Earnings Growth Ratio

PEG Ratio: NESN is poor value based on its PEG Ratio (5.8x)


Price to Book Ratio

PB vs Industry: NESN is overvalued based on its PB Ratio (7.1x) compared to the CH Food industry average (4.7x).


Future Growth

How is Nestlé forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

4.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NESN's forecast earnings growth (4.6% per year) is above the savings rate (-0.3%).

Earnings vs Market: NESN's earnings (4.6% per year) are forecast to grow slower than the Swiss market (11.3% per year).

High Growth Earnings: NESN's earnings are forecast to grow, but not significantly.

Revenue vs Market: NESN's revenue (4.4% per year) is forecast to grow slower than the Swiss market (5.2% per year).

High Growth Revenue: NESN's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NESN's Return on Equity is forecast to be high in 3 years time (31.3%)


Past Performance

How has Nestlé performed over the past 5 years?

10.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NESN has high quality earnings.

Growing Profit Margin: NESN's current net profit margins (14.4%) are lower than last year (15.3%).


Past Earnings Growth Analysis

Earnings Trend: NESN's earnings have grown by 10.8% per year over the past 5 years.

Accelerating Growth: NESN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NESN had negative earnings growth (-9.1%) over the past year, making it difficult to compare to the Food industry average (-9.1%).


Return on Equity

High ROE: NESN's Return on Equity (26.7%) is considered high.


Financial Health

How is Nestlé's financial position?


Financial Position Analysis

Short Term Liabilities: NESN's short term assets (CHF31.0B) do not cover its short term liabilities (CHF38.6B).

Long Term Liabilities: NESN's short term assets (CHF31.0B) do not cover its long term liabilities (CHF42.0B).


Debt to Equity History and Analysis

Debt Level: NESN's debt to equity ratio (90.8%) is considered high.

Reducing Debt: NESN's debt to equity ratio has increased from 45.9% to 90.8% over the past 5 years.

Debt Coverage: NESN's debt is well covered by operating cash flow (35.3%).

Interest Coverage: NESN's interest payments on its debt are well covered by EBIT (20.1x coverage).


Balance Sheet


Dividend

What is Nestlé current dividend yield, its reliability and sustainability?

2.40%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NESN's dividend (2.4%) is higher than the bottom 25% of dividend payers in the Swiss market (1.42%).

High Dividend: NESN's dividend (2.4%) is low compared to the top 25% of dividend payers in the Swiss market (3.53%).


Stability and Growth of Payments

Stable Dividend: NESN's dividends per share have been stable in the past 10 years.

Growing Dividend: NESN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63.1%), NESN's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NESN's dividends in 3 years are forecast to be covered by earnings (61.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure


CEO

Mark Schneider (56 yo)

4.5yrs

Tenure

CHF9,468,558

Compensation

Dr. Ulf Mark Schneider, also known as Mark, has been the Chief Executive Officer of Nestlé S.A. since January 1, 2017 and has been its Director since April 6, 2017. He serves as Member of Executive Board a...


CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Mark's total compensation is reasonable compared to companies of similar size in the Swiss market.

Compensation vs Earnings: Mark's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: NESN's management team is seasoned and experienced (5.1 years average tenure).


Board Members

Experienced Board: NESN's board of directors are considered experienced (4.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Nestlé S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nestlé S.A.
  • Ticker: NESN
  • Exchange: SWX
  • Founded: 1866
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: CHF315.752b
  • Shares outstanding: 2.75b
  • Website: https://www.nestle.com

Number of Employees


Location

  • Nestlé S.A.
  • Avenue Nestlé 55
  • Vevey
  • Vaud
  • 1800
  • Switzerland

Listings


Biography

Nestlé S.A., together with its subsidiaries, operates as a food and beverage company. The company operates through Zone Europe, Middle East and North Africa; Zone Americas; Zone Asia, Oceania and sub-Sahar...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 17:11
End of Day Share Price2021/07/30 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.