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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on NESN

Nestlé's recent performance has been driven by several positive factors. The company has announced a significant restructuring plan, cutting 16,000 jobs over the next two years, which is expected to improve operational efficiency. Additionally, Nestlé's valuation has been reassessed by investors, with a 14% share price gain over the past month, sparking renewed interest in the stock. The company's strategic partnerships, such as the one with Astound Business Solutions to enhance sports media delivery, also contribute to its growth prospects. Furthermore, the company's efforts to adapt to changing viewer habits and technological advancements are noteworthy.

1.c. Company Highlights

2. Nestlé's Mixed Performance in 2025

Nestlé delivered a good performance in the first half of 2025, with organic growth of 2.9%, driven by broad-based sales growth across geographies and categories. The company reported a solid underlying trading operating profit (UTOP) margin of 16.5%, despite increased investments and headwinds from tariffs and foreign exchange. However, the EPS came out at 2.48, relative to estimates at 2.68. The growth was fueled by pricing, which accelerated to 2.7%, while real internal growth (RIG) slowed to 0.2%. The company saw a significant impact from foreign exchange movements, particularly in Q2, when the Swiss franc strengthened by 10% against the dollar.

Publication Date: Jul -27

📋 Highlights
  • Organic Growth: Delivered 2.9% organic growth in H1 2025, driven by broad-based sales across geographies and categories.
  • UTOP Margin: Reported a solid underlying trading operating profit (UTOP) margin of 16.5%, despite headwinds from tariffs and FX.
  • Pricing Contribution: Pricing accelerated to 2.7%, offsetting slower real internal growth (RIG) of 0.2%.
  • Foreign Exchange Impact: Faced a significant FX impact, particularly in Q2, with a 10% strengthening of the Swiss franc against the dollar.
  • Cost Efficiency: Recognized CHF 150 million in savings from the "Fuel for Growth" program in H1, with over CHF 350 million benefiting the P&L in H2.

Financial Performance

The company's UTOP margin is expected to be significantly lower in the second half due to headwinds from tariffs, foreign exchange, and commodity costs. Input cost inflation had a negative impact on margins in the short term, but the company expects gross margins to recover over time. The company maintained its guidance for 2025, expecting organic sales growth to improve compared to 2024 and a UTOP margin at or above 16%. The "Fuel for Growth" program is delivering efficiencies, with CHF 150 million of savings recognized in the P&L in the first half, and over CHF 350 million benefiting the P&L in the second half.

Segment Performance

Nestlé's CEO, Laurent Freixe, addressed concerns about the company's performance in Greater China, stating that a strategy reset was necessary to rebalance the business model, which had become too focused on building distribution. The goal is to increase investment in consumer demand and improve the value proposition. This adjustment will have a controlled impact on growth over the next quarters. On pricing, Freixe mentioned that the company had taken action to recover costs due to unprecedented commodity price increases.

Valuation

At current prices, Nestlé trades at a P/E Ratio of 17.4, a P/B Ratio of 5.27, and a P/S Ratio of 2.02. The EV/EBITDA multiple is 13.05, and the Dividend Yield is 4.16%. The Free Cash Flow Yield is 5.95%, and the ROIC is 10.2%. The Net Debt / EBITDA is 3.11. According to analyst estimates, the company's revenue growth is expected to be around 2.5% next year.

Outlook

The company expects organic growth to continue, driven by investments in core business, growth platforms, and big bets. RIG momentum is expected to improve in the second half, as consumer reaction to confectionery price increases settles down and pet care capacity comes online. For 2026 margins, the company expects benefits from lower commodity costs, pricing actions, and cost efficiency. The company flags increasing macro headwinds, particularly in North America and Latin America, with subdued consumer environments.

3. NewsRoom

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LifeStyles Healthcare Appoints Peter Luther to Board of Directors

Dec -02

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Nestlé ‘mulls disposal of coffee-shop chain Blue Bottle’

Dec -02

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Nestlé weighs divestment of Blue Bottle Coffee chain

Dec -02

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How Analysts See the Nestlé Story Changing After Leadership Shakeup and New Targets

Nov -29

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What Do Recent Product Innovations Mean for Nestlé’s True Value in 2025?

Nov -29

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Why drinks companies should invest in soil-carbon monitoring

Nov -28

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North America Reconstituted Milk Markets, 2025-2033 by Type, Application, Distribution Channel, Country and Company Analysis

Nov -28

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United States Non-GMO Food Market Report 2025-2033, Profiles of Amy's Kitchen, Blue Diamond Growers, Organic Valley, Hain Celestial, Nestle, Kellogg's, PepsiCo, Pernod Ricard, Clif Bar, Danone

Nov -26

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.57%)

6. Segments

Zone North America (NA)

Expected Growth: 3.5%

Growing demand for premium and healthy products, increasing popularity of e-commerce, and strategic acquisitions in the region will drive Zone North America's growth.

Zone Europe (EUR)

Expected Growth: 3.4%

Nestlé’s European operations in the Eurozone will be driven by increasing demand in pet care and premium coffee, as well as cost savings from operational efficiencies.

Zone Asia, Oceania and Africa (AOA) - Including Middle East and North Africa (MENA)

Expected Growth: 5.5%

Growing middle class and increasing health awareness drive demand for premium and nutritious products in Asia, Oceania and Africa, while Nestlé’s strong brand portfolio and distribution networks provide a competitive edge.

Zone Latin America (LATAM)

Expected Growth: 5.5%

Nestlé LATAM's growth is driven by increasing urbanization, a growing middle class, and rising demand for premium and healthy products, particularly in Mexico and Brazil, the region's largest markets.

Zone Greater China (GC)

Expected Growth: 5.5%

Nestlé’s Zone Greater China is expected to grow driven by increasing demand for premium and health-oriented products, particularly in China and urban areas, as well as expansion in e-commerce channels.

Nestlé Health Science

Expected Growth: 7.2%

Growing demand for personalized health and nutritional solutions, driven by increasing healthcare costs and aging population, will fuel Nestlé’s Health Science segment.

Other businesses

Expected Growth: 6.3%

Nespresso's premium coffee experience, Nestle Health Science's personalized nutrition, and Nestle Skin Health's Cetaphil brand drive growth, fueled by consumer preferences for health and premium products.

Nespresso

Expected Growth: 4.5%

Growing demand for premium coffee experiences, increasing adoption of single-serve coffee makers, and Nespresso's strong brand reputation and continuous innovation in coffee machines and capsules drive growth.

7. Detailed Products

Coffee and Beverages

Nestlé offers a wide range of coffee and beverages, including Nescafé, Nespresso, and Dolce Gusto.

Milk Products and Ice Cream

Nestlé's milk products and ice cream include brands like Nido, Carnation, and Häagen-Dazs.

Nutrition and Health Science

Nestlé's nutrition and health science products include infant nutrition, healthcare nutrition, and performance nutrition.

Confectionery

Nestlé's confectionery products include brands like KitKat, Crunch, and Quality Street.

Culinary and Frozen Foods

Nestlé's culinary and frozen foods include brands like Stouffer's, Lean Cuisine, and Hot Pockets.

Purina PetCare

Nestlé's Purina PetCare products include pet food and treats for dogs, cats, and other pets.

Water and Beverages

Nestlé's water and beverages include brands like Nestlé Waters, Poland Spring, and Acqua Panna.

8. Nestlé S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Nestlé S.A. operates in a industry with moderate threat of substitutes. While there are some substitutes available, they are not a significant threat to the company's market share.

Bargaining Power Of Customers

Nestlé S.A. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Nestlé S.A. has a large number of suppliers, which reduces the bargaining power of individual suppliers. However, some suppliers, such as dairy farmers, may have some bargaining power due to the importance of their products to the company's operations.

Threat Of New Entrants

The food and beverage industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established companies like Nestlé S.A.

Intensity Of Rivalry

The food and beverage industry is highly competitive, with many established companies competing for market share. Nestlé S.A. faces intense competition from companies like Unilever, PepsiCo, and Kraft Heinz.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.72%
Debt Cost 3.95%
Equity Weight 39.28%
Equity Cost 5.41%
WACC 4.52%
Leverage 154.55%

11. Quality Control: Nestlé S.A. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Kraft Heinz

A-Score: 6.0/10

Value: 8.7

Growth: 3.8

Quality: 4.4

Yield: 9.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Coca-Cola Europacific Partners

A-Score: 6.0/10

Value: 3.6

Growth: 6.0

Quality: 5.0

Yield: 6.2

Momentum: 10.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Danone

A-Score: 5.8/10

Value: 3.3

Growth: 4.0

Quality: 5.2

Yield: 5.0

Momentum: 7.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
ABF

A-Score: 5.4/10

Value: 6.9

Growth: 6.7

Quality: 5.2

Yield: 3.8

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Nestle

A-Score: 4.9/10

Value: 3.2

Growth: 3.6

Quality: 5.4

Yield: 6.2

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
AAK

A-Score: 4.8/10

Value: 5.1

Growth: 7.4

Quality: 5.8

Yield: 3.1

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

78.82$

Current Price

78.82$

Potential

-0.00%

Expected Cash-Flows