Nestlé’s Mixed Performance Leads to Hold Rating Amid Market Challenges and Modest Growth Potential

Analyst Cedric Norest from Stifel Nicolaus maintained a Hold rating on Nestlé SA (NSRGF – Research Report) and keeping the price target at CHF89.00.

Cedric Norest’s rating is based on a combination of factors including Nestlé’s recent financial performance and market conditions. The company reported a 1Q25 organic sales growth of 2.8%, which exceeded the consensus expectation of 2.5%, primarily driven by pricing improvements. However, the volume/mix slightly missed expectations, indicating some challenges in market dynamics.
Despite the positive sales growth, Nestlé’s shares have recently experienced a decline, trading at a 10% discount compared to its historical performance. While the Coffee and Confectionery categories showed resilience with better-than-expected growth, other segments like Nutrition & Health Science underperformed due to certain operational challenges. Given these mixed results and the modest upside potential of 1.8% to the price target, Cedric Norest has opted for a Hold rating, reflecting a cautious yet optimistic outlook for the company’s future performance.

In another report released yesterday, J.P. Morgan also maintained a Hold rating on the stock with a CHF85.00 price target.