Nestlé NESN.SW
What does Nestlé do?
Nestlé is a food and beverage company based in Switzerland and one of the largest in its industry worldwide. Its range includes coffee, pet food, confectionery, breakfast cereals, dairy products, frozen and chilled products, ice cream, water, and nutrition and health products. Well-known brands such as Nescafé, KitKat, Nespresso and Purina are present in nearly all regions of the world.
The group generates revenue mainly through sales of branded products to grocery retailers, wholesalers and the food service industry, and increasingly through online channels and direct sales. Geographic diversification is broad, with North America and emerging markets playing an important role. Competitively, Nestlé benefits from scale, brand strength, global distribution and research capacity. It faces international competitors, regional suppliers and private-label products, which can gain market share, particularly among price-sensitive customers.
Score profile
Rank vs. Packaged Foods (26 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Nestlé ranks among the best in the group Packaged Foods (8.8/10). On growth, the company ranks below average in the group Packaged Foods (3.3/10). On valuation (higher = cheaper), the stock ranks in the bottom fifth in the group Packaged Foods (2.0/10). On financial strength, Nestlé ranks in the bottom fifth in the group Packaged Foods (1.8/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 18.1x | 12.2x | better than 14 % |
| Trailing P/E | 29.9x | 17.5x | better than 28 % |
| PEG ratio | 2.1x | 2.2x | better than 52 % |
| EV/EBITDA | 16.9x | 8.9x | better than 6 % |
| Price/sales | 2.5x | 0.9x | better than 10 % |
| Price/book | 7.6x | 1.6x | better than 6 % |
| Revenue growth | -2.5% | -2.1% | better than 37 % |
| Earnings growth | -31.5% | -13.2% | better than 29 % |
| Gross margin | 45.7% | 29.5% | better than 94 % |
| Operating margin | 16.1% | 10.6% | better than 83 % |
| Net margin | 8.4% | 3.9% | better than 78 % |
| Return on equity | 26.2% | 6.8% | better than 98 % |
| Debt/equity | 213.0% | 79.6% | better than 13 % |
| Current ratio | 0.8x | 1.7x | better than 18 % |
| Free cash flow yield | 2.0% | 5.8% | better than 21 % |
| Dividend yield | 3.6% | 3.6% | – |
| Payout ratio | 107.3% | 76.3% | – |
| Beta | 0.48 | 0.40 | – |
Valuation: what is Nestlé worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Nestlé a model range of 35.01 CHF to 57.91 CHF per share.
22 analysts, average rating “Buy”, average price target 89.04 CHF (+3.0%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Demand for everyday consumer goods is comparatively stable and supports sales across economic cycles.
- Strong brands and innovation enable pricing power and a better product mix, for example in coffee and pet food.
- Global presence and economies of scale in purchasing, production and distribution support profitability and market penetration.
Risks
- Volatile prices for raw materials such as coffee, cocoa, milk and packaging weigh on margins if they cannot be passed on.
- Private labels and price-conscious consumers put pressure on branded manufacturers and can limit sales volumes and pricing power.
- Regulation, health debates and reputational risks relating to quality, sustainability or marketing can weigh on brands and business models.
What to look for with Nestlé
Organic growth, broken down into price and volume, shows whether sales growth is based on genuine demand or merely on price increases and currency effects.