Nestlé SA: Balancing Positive Growth with Ongoing Challenges – Hold Rating Maintained

Jefferies analyst David Hayes has maintained their neutral stance on NSRGF stock, giving a Hold rating yesterday.

David Hayes has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing challenges for Nestlé SA. The company’s recent performance in the third quarter showed a notable improvement in Real Internal Growth (RIG), surpassing expectations and alleviating some investor concerns about potential year-over-year contractions. This growth was primarily driven by strong performances in regions such as Asia, Oceania, and Africa (excluding China), as well as the Nespresso segment, which helped counterbalance difficulties faced in the US market.
Despite these positive signs, Hayes notes that there are still areas requiring attention, as indicated by the anticipated slowdown in growth for the fourth quarter. Additionally, while the company’s increased transparency and efforts in cost-saving measures, such as headcount plans, are commendable, they highlight the ongoing need for strategic improvements. These mixed signals contribute to the decision to maintain a Hold rating, suggesting that while there is potential for future growth, it is balanced by current uncertainties and challenges.

In another report released yesterday, Deutsche Bank also maintained a Hold rating on the stock with a CHF81.00 price target.

Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of NSRGF in relation to earlier this year.