NGSE:NESTLE

Stock Analysis Report

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Market Cap

₦1.1t

Last Updated

2021/06/13 10:59 UTC

Data Sources

Company Financials +

Executive Summary

Nestlé Nigeria Plc manufactures, markets, and distributes food products in Nigeria. More Details


Snowflake Analysis

Adequate balance sheet second-rate dividend payer.

Share Price & News

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


Latest Share Price and Events

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

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


Market Performance


7 Day Return

0%

NESTLE

2.2%

NG Food

1.3%

NG Market


1 Year Return

40.7%

NESTLE

39.8%

NG Food

44.9%

NG Market

Return vs Industry: NESTLE matched the NG Food industry which returned 39.8% over the past year.

Return vs Market: NESTLE underperformed the NG Market which returned 44.9% over the past year.


Shareholder returns

NESTLEIndustryMarket
7 Day0%2.2%1.3%
30 Day-1.4%-0.04%1.2%
90 Day1.8%3.6%3.4%
1 Year46.9%40.7%48.9%39.8%53.7%44.9%
3 Year8.5%-6.4%9.2%-6.9%-7.6%-24.5%
5 Year123.5%84.9%122.5%77.9%27.7%-2.7%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

27.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NESTLE (NGN1400) is trading above our estimate of fair value (NGN599.32)

Significantly Below Fair Value: NESTLE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NESTLE is poor value based on its PE Ratio (27.5x) compared to the NG Food industry average (10.1x).

PE vs Market: NESTLE is poor value based on its PE Ratio (27.5x) compared to the NG market (7.9x).


Price to Earnings Growth Ratio

PEG Ratio: NESTLE is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: NESTLE is overvalued based on its PB Ratio (26.7x) compared to the NG Food industry average (1.4x).


Future Growth

How is Nestlé Nigeria forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NESTLE's forecast earnings growth (8.1% per year) is below the savings rate (13.4%).

Earnings vs Market: NESTLE's earnings (8.1% per year) are forecast to grow slower than the NG market (12.7% per year).

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

Revenue vs Market: NESTLE's revenue (7.7% per year) is forecast to grow slower than the NG market (9.8% per year).

High Growth Revenue: NESTLE's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NESTLE's Return on Equity is forecast to be very high in 3 years time (197.3%).


Past Performance

How has Nestlé Nigeria performed over the past 5 years?

20.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NESTLE has high quality earnings.

Growing Profit Margin: NESTLE's current net profit margins (13.3%) are lower than last year (15.5%).


Past Earnings Growth Analysis

Earnings Trend: NESTLE's earnings have grown significantly by 20% per year over the past 5 years.

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

Earnings vs Industry: NESTLE had negative earnings growth (-8.2%) over the past year, making it difficult to compare to the Food industry average (59.5%).


Return on Equity

High ROE: Whilst NESTLE's Return on Equity (97.12%) is outstanding, this metric is skewed due to their high level of debt.


Financial Health

How is Nestlé Nigeria's financial position?


Financial Position Analysis

Short Term Liabilities: NESTLE's short term assets (NGN148.1B) exceed its short term liabilities (NGN135.8B).

Long Term Liabilities: NESTLE's short term assets (NGN148.1B) exceed its long term liabilities (NGN63.5B).


Debt to Equity History and Analysis

Debt Level: NESTLE's debt to equity ratio (107.7%) is considered high.

Reducing Debt: NESTLE's debt to equity ratio has increased from 66.1% to 107.7% over the past 5 years.

Debt Coverage: NESTLE's debt is well covered by operating cash flow (190.1%).

Interest Coverage: NESTLE's interest payments on its debt are well covered by EBIT (21.3x coverage).


Balance Sheet


Dividend

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

4.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NESTLE's dividend (4.32%) is higher than the bottom 25% of dividend payers in the NG market (3.78%).

High Dividend: NESTLE's dividend (4.32%) is low compared to the top 25% of dividend payers in the NG market (7.86%).


Stability and Growth of Payments

Stable Dividend: NESTLE's dividend payments have been volatile in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (118.7%), NESTLE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NESTLE's dividends in 3 years are forecast to be covered by earnings (85.4% payout ratio).


Next Steps

Management

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

4.7yrs

Average management tenure


CEO

Mauricio Alarcon

4.67yrs

Tenure

Mr. Mauricio Alarcon serves as Managing Director and Chief Executive Officer at Nestlé Nigeria Plc since October 01, 2016 and also serves as its Director. He joined Nestlé Mexico in 1999. Following a numbe...


Leadership Team

Experienced Management: NESTLE's management team is considered experienced (4.7 years average tenure).


Board Members

Experienced Board: NESTLE's board of directors are considered experienced (3.9 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 Nigeria Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Nestlé Nigeria Plc
  • Ticker: NESTLE
  • Exchange: NGSE
  • Founded: 1961
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: ₦1.110t
  • Shares outstanding: 792.66m
  • Website: https://www.nestle-cwa.com/en/investors/nigeria

Number of Employees


Location

  • Nestlé Nigeria Plc
  • 22-24, Industrial Avenue
  • Ilupeju
  • Lagos
  • Nigeria

Listings


Biography

Nestlé Nigeria Plc manufactures, markets, and distributes food products in Nigeria. The company operates through two segments, Food and Beverages. It offers food products under the Maggi, Cerelac, SMA, Nan...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/13 10:59
End of Day Share Price2021/06/11 00:00
Earnings2021/03/31
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.