UBS Notes Nestlé's 'Steady' Strategy Progress, 'Limited' Upside Potential; Price Target Up

07:19 AM EDT, 10/23/2026 (MT Newswires) -- UBS Global Research highlighted Nestlé's (NESN.SW) "steady" progress under its new real internal growth-driven strategy in the third quarter, while flagging "limited" upside potential amid priced-in growth momentum and macroeconomic headwinds. "Nestlé's Q3 Real Internal Growth (RIG = volume + mix) came in at +2.8%, marking a substantial sequential acceleration (Q2 RIG was +1.8%) and beat relative to street's expectations (company compiled consensus for +1.5%). Importantly, the RIG performance was broad based with all 3 Zones showing an improvement in Q2, with the US recovering and Petcare confirming its renewed momentum. All in all, Q3 brought tangible evidence of the progress made by Nestlé under its new, RIG focused, strategy," according to a Friday note. Meanwhile, analysts view the third-quarter RIG outperformance as a potential one-off, driven by temporary gains in food and snacks rather than broad-based long-term acceleration. Additionally, the research firm expects anticipated future price hikes to threaten volume growth, while "challenging" mature markets and uncertain commodity costs due to the Middle East conflict and upcoming El Niño present ongoing headwinds. As such, UBS ticked up its price target to 82 francs from 81 francs, while rating the stock at neutral. The research firm also raised Nestlé's full-year 2026 organic growth forecast to 3.7% from 3.5% and lifted its adjusted EPS estimate by 1% to 4.64 francs, while for 2027, the organic growth forecast was increased to 3.8% from 3.4%, and the adjusted EPS estimate was "broadly unchanged" at 4.91 francs.