Nestlé SA (NESN) AI Stock Analysis

• Market Cap: CHF185.72B
• Dividend Yield: 3.92%
• Average Volume (3M): 2.99M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.76
• Revenue Growth: -1.32%
• EPS Growth: -6.27%
• Country: CH
• Employees: 251,786
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 1.97
• Shares Outstanding: 2,576,520,000
• 10 Day Avg. Volume: 3,003,339
• 30 Day Avg. Volume: 2,989,774
• PEG Ratio: -15.15
• Price to Book (P/B): 5.41
• Price to Sales (P/S): 2.12
• P/FCF Ratio: 18.15
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: CHF83.46
• Price Target Upside: 13.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: CHF85.00 ▲(15.76% Upside)

Nestlé's overall stock score is supported by strong financial performance and a reasonable valuation. While technical analysis and earnings call insights present some challenges, the company's robust cash flow and profitability metrics provide a solid foundation for long-term stability.

Positive Factors

Cash Flow Generation

Strong free cash flow growth indicates efficient operations and capital management, providing financial flexibility for investments and debt management.

Market Share Improvements

Gaining market share in key regions strengthens Nestlé's competitive position, supporting long-term revenue growth and brand dominance.

Fuel for Growth Program

The program's cost savings enhance profitability and allow for reinvestment in growth initiatives, bolstering long-term financial health.

Negative Factors

Revenue Growth Decline

Declining revenue growth poses challenges for sustaining long-term expansion and may pressure profitability if not addressed.

Increased Leverage

Higher leverage can constrain financial flexibility and increase risk, especially if economic conditions worsen or revenue growth slows.

China Market Challenges

Challenges in China, a key growth market, could hinder Nestlé's expansion efforts and require strategic adjustments to regain momentum.

Nestlé SA Business Overview & Revenue Model

Company Description

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; and Zone Asia, Oceania and sub-Saharan Africa segments. It offers baby foods under the Cerelac, Gerber, Nido, and NaturNes brands; bottled water under the Nestlé Pure Life, Perrier, and S.Pellegrino brands; cereals under the Fitness, Nesquik, cheerios, and Lion Cereals brands; and chocolate and confectionery products under the KitKat, Nestle L'atelier, Nestle Toll House, Milkybar, Smarties, Quality Street, Aero, Garoto, Orion, and Cailler brands. The company also provides coffee products under the Nescafé, Nespresso, Nescafé Dolce Gusto, Starbucks Coffee At Home, and Blue Bottle Coffee brands; culinary, chilled, and frozen foods under the Maggi, Hot Pockets, Stouffer's, Thomy, Jacks, TombStone, Herta, Buitoni, DiGiorno, and Lean Cuisine brands; dairy products under the Carnation, Nido, Coffee-Mate, and La Laitière brands; and drinks under the Nesquik, Nestea, Nescafé, and Milo brands. In addition, it offers food service products under the Milo, Nescafé, Maggi, Chef, Nestea, Stouffer's, Chef-Mate, Sjora, Minor's, and Lean Cuisine brand names; healthcare nutrition products under the Boost, Peptamen, Resource, Optifast, and Nutren Junior brands; ice cream products under the Dreyer's, Mövenpick, Häagen-Dazs, Nestlé Ice Cream, and Extrême brands; and pet care products under the Purina, ONE, Alpo, Felix, Pro Plan, Cat Chow, Fancy Feast, Bakers, Friskies, Dog Chow, Beneful, and Gourmet brands. The company was founded in 1866 and is headquartered in Vevey, Switzerland.

How the Company Makes Money

Nestlé generates revenue through a multi-faceted business model that involves the production and sale of a vast range of food and beverage products. Key revenue streams include sales from its various product categories such as powdered and liquid beverages, dairy products, and pet care items. The company leverages its extensive distribution network to reach consumers globally, and it also engages in strategic partnerships with retailers and suppliers to enhance its market presence. Additionally, Nestlé invests in innovation and product development to meet changing consumer demands, which contributes to sustained revenue growth. The company benefits from economies of scale due to its size and global reach, allowing it to optimize production and reduce costs, further enhancing profitability.

Nestlé SA Financial Statement Overview

Summary

Nestlé demonstrates strong profitability and cash flow generation, underpinning its stable financial position. Despite a slight dip in revenue growth and increased leverage, the company maintains healthy margins and cash flow metrics, which support its long-term financial health.

Income Statement

Nestlé's income statement shows mixed performance. The gross profit margin stood at approximately 46.9% in 2024, indicating strong profitability. However, the net profit margin decreased slightly to 11.9% from 12.0% in 2023, reflecting some pressure on net income despite stable revenues. Revenue growth was negative at -1.7% from 2023 to 2024, which is a concern for future growth trajectory. EBIT and EBITDA margins are healthy at 16.1% and 20.3%, respectively, signaling operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial position with a debt-to-equity ratio of 1.77, up from 1.54 last year, indicating increased leverage. The equity ratio stands at 25.8%, a decline from previous years, showing reduced equity as a percentage of total assets. However, the return on equity decreased to 30.3% from 31.4%, reflecting a slight drop in profitability for shareholders.

Cash Flow

Nestlé's cash flow statement highlights strong free cash flow generation with a 10.0% growth rate from 2023 to 2024. The operating cash flow to net income ratio is robust at 1.53, indicating efficient cash generation from operations. The free cash flow to net income ratio was also solid at 0.98, showcasing effective capital management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	90.90B	91.72B	93.35B	94.78B	87.47B	84.68B
Gross Profit	42.41B	43.05B	43.02B	43.03B	42.00B	41.71B
EBITDA	17.55B	18.18B	18.16B	18.24B	17.14B	16.83B
Net Income	10.30B	10.88B	11.21B	9.27B	16.91B	12.23B
Balance Sheet
Total Assets	130.12B	139.26B	126.55B	135.18B	139.14B	124.03B
Cash, Cash Equivalents and Short-Term Investments	5.51B	7.87B	5.85B	6.69B	14.04B	8.61B
Total Debt	65.60B	63.56B	55.24B	54.31B	46.89B	40.04B
Total Liabilities	101.08B	102.57B	90.16B	92.39B	85.42B	77.51B
Stockholders Equity	28.83B	35.92B	35.74B	41.98B	53.14B	45.70B
Cash Flow
Free Cash Flow	9.34B	10.71B	9.74B	6.55B	8.52B	10.01B
Operating Cash Flow	14.58B	16.68B	15.94B	11.91B	13.86B	14.38B
Investing Cash Flow	-6.88B	-8.62B	-6.20B	-2.51B	-3.65B	-5.67B
Financing Cash Flow	-7.29B	-7.36B	-9.76B	-10.78B	-8.55B	-10.38B

Nestlé SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 73.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:NESN, the sentiment is Negative. The current price of 73.43 is below the 20-day moving average (MA) of 74.34, below the 50-day MA of 77.20, and below the 200-day MA of 78.63, indicating a bearish trend. The MACD of -1.29 indicates Positive momentum. The RSI at 40.59 is Neutral, neither overbought nor oversold. The STOCH value of 56.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:NESN.

Nestlé SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NESN	71 Outperform	CHF185.72B	18.33	32.66%	3.92%	-1.32%	-6.27%
EMMN	71 Outperform	$4.18B	19.63	18.34%	2.26%	10.78%	10.53%
ARYN	69 Neutral	CHF1.35B	13.67	24.18%	―	0.90%	30.62%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
BELL	60 Neutral	CHF1.39B	11.22	7.93%	3.18%	4.59%	-3.22%