# Nestlé (SWX:NESN)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/SWX/NESN

Price CHF 85.85 (CHF), market cap CHF 220.8B, Consumer Staples - Packaged Foods.

## Valuation

- SE Reference Value (expected value, DCF): CHF 122.60 (central 50% range CHF 99.29 to CHF 155.77), +43% against the price; range width narrow
- SE Grade: 1 of 3 (Value 3, Quality 2, Moat 2)
- Consensus Rating: Buy (Strong buy 9, Buy 3, Hold 10, Sell 0, Strong sell 1)
- Consensus Price (mean): CHF 86.86, +1% against the price

## Key metrics

Financials in CHF. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | CHF 88.78B | CAGR 1.2% | CAGR 0.0% | P100 |
| Revenue growth | -2.3% | -1.5% | 0.2% | P20 |
| Gross margin | 45.7% | 46.1% | 48.6% | P47 |
| Operating margin | 15.5% | 16.7% | 16.7% | P40 |
| Net margin | 8.4% | 11.9% | 11.5% | P40 |
| FCF yield | 5.7% | 3.6% | 4.1% | P53 |
| FCF margin | 14.1% | 11.0% | 12.1% | P53 |
| FCF / net income | 1.68x | 0.91x | 0.99x | P75 |
| ROIC | 12.1% | 13.8% | 13.6% | P50 |
| ROE | 25.6% | 28.8% | 24.0% | P80 |
| ROA | 5.8% | 7.8% | 7.6% | P57 |
| EPS | CHF 2.89 | CAGR -4.0% | CAGR 2.7% | - |
| EPS growth | -27.8% | -1.1% | -0.1% | P0 |
| Book value per share | CHF 11.36 | CAGR -4.5% | CAGR -5.3% | - |
| FCF per share | CHF 4.87 | CAGR 4.1% | CAGR 1.9% | - |
| Dividend per share | CHF 3.10 | CAGR 2.4% | CAGR 3.4% | - |
| Dividend yield | 3.6% | 2.8% | 2.9% | P72 |
| Payout ratio (FY2025) | 88.3% | 72.8% | 72.9% | P85 |
| Diluted shares | 2,572.2M | CAGR -2.0% | CAGR -2.0% | P43 |
| Buyback yield | -0.0% | 2.0% | 2.3% | P43 |
| Debt/equity | 2.13x | 1.52x | 0.87x | P3 |
| Enterprise value | CHF 277.7B | CAGR -4.5% | CAGR 0.7% | P97 |
| Long-term debt | CHF 46.50B | CAGR 10.6% | CAGR 17.2% | P100 |

## Company Note (H1 2026)

Written by AI from the data above.

**Nestlé's first half of 2026 showed** a group still absorbing self-inflicted and external drags. Revenue fell 2.5% to CHF 43.30B. Management said higher input costs, tariffs and currency were largely offset by cost savings, pricing and volume leverage. The infant formula recall cut Zone Europe sales and the group margin, and Starbucks coffee pricing met an elasticity reaction that hurt North American real internal growth in the second quarter. The stock looks undervalued: SE fair value of CHF 123 is 42.8% above the price.

**Management tightened full-year organic growth guidance** to 3%-4%. It expects the UTOP margin to improve on 2025, with the second half broadly similar to the first. Free cash flow should exceed CHF 9 billion, cumulative cost savings should reach CHF 2 billion, and currency should cut reported sales by around 3%. Savings are to fund marketing behind growth platforms, alongside the Waters partnership and the VMS and ice cream disposals. Analysts pressed on pet care destocking, which management called one-off. "Now it's all about consistent delivery," the CEO said.

**Analysts expect a slow recovery** rather than a rebound. They forecast adjusted EPS growth of 2.3% for FY2026, then 5.4% for FY2027, with FY2026 revenue up only 0.5%. The price implies revenue shrinking 3.4% a year, 3.9pp below that consensus. That gap is the opportunity: the market is pricing contraction where analysts and management see modest growth. The earnings record is uneven, with a beat in 1 of the last 2 reported periods.

**Returns have strengthened**. ROE rose from 19.5% in FY2022 to 26.3% in FY2025, in line with its five-year median. It sits above the peer median, at the 64th percentile of similar-sized companies. FCF margin climbed from 7.2% to 12.7% over the same span. Free cash flow now runs at 1.68x net income, well above its 0.91x median and in the 86th percentile of peers. What holds Quality back is a modest spread of ROIC over the cost of capital, along with share count movements.

**SE fair value of CHF** 123 is 42.8% above the price, with high confidence. The trailing P/E of 29.7x is above its 23.8x long-run median, but that rests on reported EPS that is not comparable with adjusted forecasts. The analyst target of CHF 87 sits 1.2% above the price. Debt/equity of 2.13x is 40% above its five-year median. For the price to hold, cost savings must restore volume and margin. A second-half margin falling short of the first half's would show it is not.

**The SE Score** is 1 of 3. Quality earns two stars on a return on capital of 13% against a 6.0% cost of capital and solid interest cover, held back by net debt at 3.4 times EBITDA. Moat earns two stars for stable gross margins and a ten-year median ROIC of 14%. Value earns three stars, with SE fair value 42.8% above the price. The price left the business tier as it was. A ranking of five-year returns then lowered the overall score from two stars to one.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology