Assessing Nestlé (SWX:NESN) Valuation After Recent Mixed Returns And Longer Term Momentum Weakness

Nestlé (SWX:NESN) is back in focus after recent share price moves, with the stock showing mixed short term returns and a modestly positive performance over the past 3 months, prompting fresh questions about how its current valuation stacks up.

See our latest analysis for Nestlé.

At a share price of CHF 76.16, Nestlé’s short term share price returns have been weak, while its 1 year total shareholder return of 5.3% contrasts with deeper three and five year total return declines. This points to fading longer term momentum.

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With a CHF 76.16 share price, mixed recent returns, an indicated 36.8% intrinsic discount and a 15.4% gap to analyst targets, the key question is whether Nestlé is genuinely undervalued or if the market already prices in future growth.

Most Popular Narrative Narrative: 13.6% Undervalued

With Nestlé’s fair value in the most followed narrative set at CHF 88.15 against the last close of CHF 76.16, the implied upside rests on a detailed set of revenue, margin and valuation assumptions.

“Analysts expect earnings to reach CHF 12.0 billion (and earnings per share of CHF 4.65) by about September 2028, up from CHF 10.3 billion today. The analysts are largely in agreement about this estimate.”

Read the complete narrative.

Curious what sits behind that earnings bridge? Revenue growth assumptions, margin repair and a higher future earnings multiple all work together in this narrative. Want to see how?

Result: Fair Value of $88.15 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on cost pressures easing and consumer demand holding up. Sustained margin strain or weaker volumes could quickly erode the thesis behind that 13.6% discount.

Find out about the key risks to this Nestlé narrative.

Build Your Own Nestlé Narrative

If you see the numbers differently or simply prefer to test your own assumptions, you can shape a personalised Nestlé view in minutes with Do it your way.

A great starting point for your Nestlé research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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