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Nestlé has seen a dramatic decline in market value, losing nearly CHF 140 billion, as high price increases and a cost-of-living crisis have pressured consumers, particularly in emerging markets. The company has also lagged in the plant-based food sector, failing to capitalize on growing trends. With ongoing stock price drops and investor distrust in management, Chairman Paul Bulcke's position is increasingly precarious.
The Swiss stock market experienced notable gains on Friday, driven by demand for defensive stocks amid geopolitical tensions related to Russia's nuclear strategy. Roche rose by 1.3%, Novartis by 2.3%, and the SMI index increased by 1.1% to 11,717 points, with 19 of the 20 SMI stocks gaining. The euro's recovery against the franc also supported the market, while Zurich Insurance climbed 1.0% following positive analyst feedback.
Kantonalbank has set the lowest price target for Nestlé following the recent Investor Day, where no surprises emerged. Helvetische Bank noted that while growth measures are sensible, patience is required as results may take 12 to 18 months to materialize. This shift in expectations could pave the way for a positive share development.
Investors are concerned about President Trump's policies and the escalating war in Ukraine, leading to a shift towards safe havens. Nestlé's shares have fallen over 20% this year due to slow growth, while Nvidia reported impressive sales but faced high expectations. Swiss GDP growth slowed to 0.2%, with a notable trade surplus driven by the chemicals and pharmaceuticals sector.
The Global Pediatric Healthcare market is projected to grow from $175.6 billion in 2024 to $290 billion by 2032, with a CAGR of 6.5%. Key players include Abbott, Pfizer, and Merck, focusing on pharmaceuticals, nutrition, medical devices, and vaccines across various applications like hospitals and homecare. The market is expanding rapidly in the Asia-Pacific region, while North America remains the dominant market.
UBS AG has maintained a "Neutral" rating for Nestlé SA, setting a target price of 83 francs. Analyst Guillaume Delmas noted that while the recent capital market day was reassuring, there are no immediate price drivers expected for the stock. Currently, Nestlé shares are trading at 82.14 EUR.
Nestlé's new CEO, Laurent Freixe, is implementing a corporate restructuring plan that has yet to gain the confidence of the stock market, despite its sensible approach. The company's shares have plummeted nearly 40% over the past three years, raising concerns among Swiss investors, as Nestlé is a significant component of many pension fund portfolios.
UBS AG has maintained a "Neutral" rating for Nestlé shares, setting a target price of 83 francs, following a reassuring capital market day. The share price rose 0.4% to CHF 77.00, indicating a potential upside of 7.79% to the target, despite an 18.5% decline since the start of 2024. Nestlé is set to release its Q4 2024 earnings on February 13, 2025.
UBS has maintained a "Neutral" rating for Nestlé, setting a target price of 83 francs. Analyst Guillaume Delmas noted that the company"s recent capital market day was reassuring, but he does not anticipate any short-term price drivers.
Nestlé S.A., the world"s leading food group, has a diverse product portfolio with significant sales in powdered and liquid beverages (26.7%), pet food (20.3%), and pharmaceutical, nutrition, and wellness products (16.4%). Geographically, the company generates 35% of its sales from the United States and Canada, with notable contributions from Asia and Oceania (21.4%) and Latin America (13.7%).
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