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Nestle SA ADR NSRGY

Morningstar Rating
$104.89 −0.05 (0.05%)
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Company Report

Nestle Earnings: Organic Growth Short of Expectations; Cautious Fiscal 2024 Guidance

Nestle reported fiscal 2023 results that included organic growth of 7.2% (real internal growth of negative 0.3% and pricing up 7.5%), below the company-compiled consensus estimate of 7.4% and our own 7.5%, driven predominantly by worse-than-expected real internal growth (negative 0.3% versus negative 0.1% for consensus and 0.1% in our model). The underlying 17.3% trading operating margin was also short of the 17.4% consensus expectation, but ahead of our 17.1% forecast. Regionally, real internal growth (volume and mix effect) was positive in emerging markets and negative in developed markets as pricing continued to be strong across all geographies. At the product category level, water and prepared dishes, and cooking aids had the weakest real internal growth in fiscal 2023, down 5.1% and 2.5% respectively.

Price vs Fair Value

NSRGY is trading at a 15% discount.
Price
$104.94
Fair Value
$119.00
Uncertainty
Low
1-Star Price
$563.00
5-Star Price
$84.30
Economic Moat
Qchl
Capital Allocation
Pkfcgyvy

Bulls Say, Bears Say

Bulls

The breadth and diversity of Nestle's portfolio and its geographic reach allow for easier absorption of brand and operational shocks.

Bears

Given inflationary pressures, volume growth in some of its product categories appears to be weakening, particularly in prepared dishes and milk products, a function of higher demand elasticities and lower pricing power in these categories.

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News

Trading Information

Previous Close Price
$104.94
Day Range
$104.74105.59
52-Week Range
$104.60131.64
Bid/Ask
$104.81 / $104.87
Market Cap
$274.95 Bil
Volume/Avg
117,387 / 481,461

Key Statistics

Price/Earnings (Normalized)
20.04
Price/Sales
2.68
Dividend Yield (Trailing)
3.15%
Dividend Yield (Forward)
3.25%
Total Yield
5.28%

Company Profile

With a 150-year-plus history, Nestle is the largest food and beverage manufacturer in the world by sales, generating more than CHF 90 billion in annual revenue. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle also owns around 20% of French cosmetics firm L'Oreal. The company employs 275,000 people around the world and has a vast portfolio of global products, with more than 30 brands each achieving more than CHF 1 billion in sales annually and a geographic presence that spans almost 190 countries.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Core
Total Number of Employees
270,000

Competitors

Valuation

Metric
NSRGY
MDLZ
GIS
Price/Earnings (Normalized)
20.0421.5314.52
Price/Book Value
6.463.483.90
Price/Sales
2.682.781.89
Price/Cash Flow
16.4019.2811.82
Price/Earnings
NSRGY
MDLZ
GIS

Financial Strength

Metric
NSRGY
MDLZ
GIS
Quick Ratio
0.490.330.30
Current Ratio
0.830.620.64
Interest Coverage
8.5611.257.71
Quick Ratio
NSRGY
MDLZ
GIS

Profitability

Metric
NSRGY
MDLZ
GIS
Return on Assets (Normalized)
10.01%6.42%8.39%
Return on Equity (Normalized)
34.58%16.35%26.03%
Return on Invested Capital (Normalized)
14.97%9.69%13.30%
Return on Assets
NSRGY
MDLZ
GIS
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