Nestlé SA (NESN) AI Stock Analysis

• Market Cap: $189.38B
• Dividend Yield: 4.08%
• Average Volume (3M): 3.59M
• Price to Earnings (P/E): 18.7
• Beta (1Y): 0.68
• Revenue Growth: -1.32%
• EPS Growth: -6.27%
• Country: CH
• Employees: 251,786
• Sector: Consumer Defensive
• Sector Strength: 50
• Industry: Packaged Foods
• EPS (TTM): 1.97
• Shares Outstanding: 2,576,520,000
• 10 Day Avg. Volume: 3,865,503
• 30 Day Avg. Volume: 3,592,960
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 2.87
• Enterprise Value/Gross Profit: 6.11
• Enterprise Value/Ebitda: 14.10
• 1Y Price Target: $83.23
• Price Target Upside: 11.40% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

• Rating: 69 Neutral
• Price Target: CHF81.00 ▲(8.42% Upside)

Nestlé's stock score is supported by strong financial performance and a balanced earnings call, which highlight both growth opportunities and challenges. While technical analysis suggests near-term weakness, the stock's reasonable valuation and attractive dividend yield provide a buffer. Key risks include leverage, revenue growth challenges, and geopolitical factors impacting margins.

Positive Factors

Financial Performance

EPS was 6% ahead of consensus, driven primarily by better than expected UTOP.

Market Share and Growth

Market share momentum is building gradually, which is seen as a positive sign for the company's growth.

Strategic Leadership

The market is likely to see the appointment of Pablo Isla as a major shift for Nestlé, a signal that relying on the 'old Nestlé way' is not enough to evolve and future-proof the group.

Negative Factors

Cash Flow and Debt

Continued poor cash flow conversion and increased debt levels, which increased by CHF4bn during H1, are concerns for the company's financial health.

Operating Margins

Management has noted that H2 margins will be significantly below H1, indicating future cost pressures.

SNAP/Food Voucher Cuts

The proposed $300bn cut to SNAP/food vouchers over the next 10 years threatens direct and indirect demand headwinds for Nestlé.

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 diverse range of products across multiple categories, primarily in food and beverages. The company employs a multi-channel revenue model that includes retail sales, e-commerce, and foodservice distribution. Key revenue streams are derived from popular product lines, including powdered and liquid beverages, pet care products, and dairy items. Nestlé also capitalizes on strategic partnerships with retailers and distributors to enhance market reach and accessibility. The company invests in innovation and product development to respond to consumer trends, such as health and wellness, which further contributes to its earnings through premium product offerings and brand loyalty.

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. Continued focus on managing debt levels and stimulating revenue growth will be crucial for sustaining its financial strength.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	91.72B	93.35B	94.78B	87.47B	84.68B
Gross Profit	43.05B	43.02B	43.03B	42.00B	41.71B
EBITDA	18.66B	17.80B	16.08B	15.20B	18.37B
Net Income	10.88B	11.21B	9.27B	16.91B	12.23B
Balance Sheet
Total Assets	139.26B	126.55B	135.18B	139.14B	124.03B
Cash, Cash Equivalents and Short-Term Investments	7.87B	5.85B	6.69B	14.04B	8.61B
Total Debt	63.56B	55.24B	54.31B	46.89B	40.04B
Total Liabilities	102.57B	90.16B	92.39B	85.42B	77.51B
Stockholders Equity	35.92B	35.74B	41.98B	53.14B	45.70B
Cash Flow
Free Cash Flow	10.71B	9.74B	6.55B	8.52B	10.01B
Operating Cash Flow	16.68B	15.94B	11.91B	13.86B	14.38B
Investing Cash Flow	-8.62B	-6.20B	-2.51B	-3.65B	-5.67B
Financing Cash Flow	-7.36B	-9.76B	-10.78B	-8.55B	-10.38B

Nestlé SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 74.71 is above the 20-day moving average (MA) of 73.83, below the 50-day MA of 75.34, and below the 200-day MA of 79.10, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 50.59 is Neutral, neither overbought nor oversold. The STOCH value of 65.48 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	69 Neutral	$189.38B	18.71	32.66%	4.08%	-1.32%	-6.27%
Sector *	63 Neutral	$20.42B	14.64	-2.96%	3.11%	2.04%	-6.12%
0MFY	―	CHF1.82B	18.16	24.18%	―	―	―
EMLZF	―	$4.86B	19.79	18.34%	2.35%	―	―
0RFX	―	CHF1.56B	12.73	7.93%	2.77%	―	―

Nestlé SA Corporate Events

Nestlé Reports Strategic Growth Amidst Global Challenges in 2025

Nestlé’s half-year results for 2025 show a strategic focus on accelerating growth and improving market share through increased investment and efficiency. The company reported a 2.9% organic growth rate, driven by pricing adjustments and innovation, despite challenges in Greater China. Nestlé is addressing underperforming segments and investing in premium brands in its Vitamins, Minerals, and Supplements business. The company maintains its 2025 guidance, acknowledging macroeconomic risks but remaining committed to medium-term growth and profitability.

The most recent analyst rating on (CH:NESN) stock is a Buy with a CHF110.00 price target. To see the full list of analyst forecasts on Nestlé SA stock, see the CH:NESN Stock Forecast page.

Nestlé Announces Leadership Transition with New Chairman Proposal

Nestlé SA has announced that Paul Bulcke, the Chairman of the Board of Directors, will not seek re-election at the Annual General Meeting in April 2026, marking the end of nearly 50 years of service. Pablo Isla, currently the Vice Chairman, is proposed to succeed him, ensuring a smooth transition. This leadership change is expected to continue Nestlé’s strategic focus on Nutrition, Health, and Wellness, with the new team poised to drive the company’s growth and value creation.

The most recent analyst rating on (CH:NESN) stock is a Buy with a CHF115.00 price target. To see the full list of analyst forecasts on Nestlé SA stock, see the CH:NESN Stock Forecast page.