Nestlé SA (NESN) AI Stock Analysis

• Market Cap: $191.87B
• Dividend Yield: 3.92%
• Average Volume (3M): 2.99M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.80
• Revenue Growth: -1.32%
• EPS Growth: -6.27%
• Country: CH
• Employees: 251,786
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 2.15
• Shares Outstanding: 2,576,520,000
• 10 Day Avg. Volume: 3,003,339
• 30 Day Avg. Volume: 2,989,774
• PEG Ratio: -1.38
• Price to Book (P/B): 6.17
• Price to Sales (P/S): 2.26
• P/FCF Ratio: 17.81
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 2.77
• Enterprise Value/Gross Profit: 6.06
• Enterprise Value/Ebitda: 13.99
• 1Y Price Target: $83.21
• Price Target Upside: 9.69% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 4.36
• Revenue Forecast (FY): $88.38B

• Rating: 61 Neutral
• Price Target: CHF80.00 ▲(5.46% Upside)
• Action: Reiterated Date: 03/21/26
• Date: Action: Reiterated 03/21/26

The score is driven primarily by solid underlying fundamentals (strong margins and durable free cash flow) tempered by higher leverage and muted recent revenue momentum. Technicals are a major drag due to a clear downtrend across key moving averages and negative MACD, while valuation is supported by the ~4% dividend but not especially cheap on earnings.

Positive Factors

Margin resilience

Nestlé’s sustained mid-to-high 40s gross margin and healthy operating/EBITDA margins provide a durable profitability buffer typical of leading packaged-food businesses. Strong margins support cash flow, enable reinvestment in brands and R&D, and help absorb commodity or input cost shocks over the medium term.

Durable free cash flow

Consistently positive and recently rising free cash flow gives Nestlé durable internal funding for dividends, debt service, buybacks and capex. Reliable FCF improves capital allocation flexibility, supports shareholder returns and cushions strategic investments even if revenue growth is muted.

Diversified brands & pet care

A broad global portfolio and deep brand equity across beverages, culinary, nutrition and pet care reduces concentration risk. Pet care’s repeat-purchase dynamics and premiumization tailwinds offer a structural growth engine, lowering cyclicality and supporting resilient revenues over time.

Negative Factors

Soft revenue trend

A multi-year soft top line (down ~1–2% recently and -2.04% revenue growth) undermines scale economics and can limit pricing leverage. Continued revenue weakness risks eroding market share, constraining reinvestment capacity and putting pressure on medium-term growth targets.

Rising leverage

Meaningful increase in leverage reduces financial flexibility: higher interest and refinancing exposure constrain capacity for M&A, large strategic investments or opportunistic buybacks. Elevated debt heightens vulnerability to rate shocks and limits downside protection in downturns.

Margin and earnings compression

Sharp net margin compression and negative EPS growth point to an erosion of profitability versus prior years. If structural, this reduces returns on capital, weakens ability to fund strategic initiatives from earnings, and increases sensitivity to cost or demand shocks over the medium term.

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 primarily makes money by selling branded consumer products at scale across multiple categories, earning revenue when it ships finished goods to retailers, distributors, and other customers and recognizes net sales after deductions such as trade allowances, promotions, and returns (where applicable). Its largest and most important revenue stream comes from everyday packaged food and beverage purchases: coffee and other beverages (including soluble coffee, portioned coffee systems and related consumables), culinary and prepared foods (seasonings, soups, sauces, and frozen/chilled meals in some markets), confectionery and snacks, and dairy/ice cream products. A major growth and profit contributor is pet care, where it sells pet food and pet-related products under established brands through supermarkets, specialty pet retailers, and e-commerce; this category typically benefits from repeat purchasing and premiumization. Nestlé also generates revenue from nutrition and health-related offerings, including infant and maternal nutrition and its health science business, which sells medical nutrition and specialized nutritional products often distributed through healthcare channels as well as retail. Bottled water and other beverages contribute revenue through sales to retailers and on-premise channels, though category exposure varies by market and portfolio actions. Across these businesses, Nestlé’s earnings are driven by a combination of volume, product mix (premium vs. mainstream), pricing, brand-led consumer demand, and geographic diversification. The company supports sales with extensive marketing, R&D, and a large manufacturing and distribution network; it also benefits from partnerships and licensing arrangements in certain product areas (for example, brand licensing/strategic collaborations in coffee) when applicable, but specific partnership economics are not detailed here.

Nestlé SA Financial Statement Overview

Summary

Profitability and cash generation are solid (healthy operating/EBITDA margins and consistently positive free cash flow), but revenue has been soft in recent years and leverage has increased meaningfully (higher debt-to-equity), reducing balance-sheet flexibility.

Income Statement

Nestlé shows strong and resilient profitability for a packaged foods business, with gross margin holding in the mid-to-high 40s and operating profitability remaining healthy (2025 operating margin ~15.9%; EBITDA margin ~20.0%). However, the top line has been soft for several years (revenue down ~1–2% in 2023–2025 after growth in 2022), and net margin has compressed versus the 2021 peak (2025 net margin ~10.1% vs. ~19.3% in 2021). Overall: high-quality margins, but a weaker recent growth and earnings trajectory.

Balance Sheet

Leverage has trended higher, with debt-to-equity moving from ~0.88 (2020–2021) to ~1.76 (2024–2025), which reduces balance sheet flexibility. Equity has also declined from 2021 levels, while total debt remains elevated. Offsetting this, returns on equity are strong (roughly ~27–31% in 2023–2025), suggesting the company is still generating attractive profitability on the capital base. Net: strong returns, but meaningfully higher leverage is the key watch item.

Cash Flow

Cash generation is solid and improving recently, with free cash flow rising strongly in 2023 and 2025 (2025 free cash flow up ~21.8%). Free cash flow is consistently positive and sizable (about 6.5B–11.4B from 2022–2025). That said, cash conversion to earnings is moderate rather than exceptional (free cash flow running at ~55–72% of net income across the period), indicating some working-capital/cash-timing or reinvestment demands. Overall: healthy, durable cash flow with decent (not perfect) earnings-to-cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	89.49B	91.72B	93.35B	94.78B	87.47B
Gross Profit	40.80B	43.05B	43.02B	43.03B	42.00B
EBITDA	17.90B	18.18B	18.16B	18.24B	17.14B
Net Income	9.03B	10.88B	11.21B	9.27B	16.91B
Balance Sheet
Total Assets	127.15B	139.26B	126.55B	135.18B	139.14B
Cash, Cash Equivalents and Short-Term Investments	6.23B	7.87B	5.85B	6.69B	14.04B
Total Debt	57.85B	63.56B	55.24B	54.31B	46.89B
Total Liabilities	94.09B	102.57B	90.16B	92.39B	85.42B
Stockholders Equity	32.81B	35.92B	35.74B	41.98B	53.14B
Cash Flow
Free Cash Flow	11.38B	10.71B	9.74B	6.55B	8.52B
Operating Cash Flow	15.90B	16.68B	15.94B	11.91B	13.86B
Investing Cash Flow	-5.56B	-8.62B	-6.20B	-2.51B	-3.65B
Financing Cash Flow	-10.88B	-7.36B	-9.76B	-10.78B	-8.55B

Nestlé SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 75.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 75.86 is below the 20-day moving average (MA) of 80.57, below the 50-day MA of 78.05, and below the 200-day MA of 77.45, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 33.47 is Neutral, neither overbought nor oversold. The STOCH value of 4.83 is Positive, 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
EMMN	70 Outperform	CHF4.36B	17.32	22.25%	2.26%	10.78%	10.53%
ARYN	69 Neutral	CHF1.46B	12.13	21.15%	―	0.90%	30.62%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
NESN	61 Neutral	$191.87B	22.43	32.66%	3.92%	-1.32%	-6.27%
BELL	53 Neutral	CHF1.29B	14.64	7.93%	3.18%	4.59%	-3.22%