JPM upgrades Nestle, sees sales and margins rising

Nestle SA

16/10/2026 08:06

** JPMorgan upgrades Swiss food and drinks group Nestle NESN.S to "overweight" from "neutral", as it expects sales growth and margins to bounce back
** It sees Nestle's real internal growth (RIG), or sales volumes growth, improving towards what it describes as "the crucial 2%+ level"
** Broker expects 4.2% like-for-like sales growth -- best since 2023 -- and EBIT margin above 17% already in FY 2027, helped by better demand, firm pricing and 3 billion Swiss francs ($3.6 billion) of savings by FY 2028 
** JPM sees improvement led by a US turnaround and continued strength in emerging markets, helped by a weaker prior-year base in nutrition and pet care
** Broker says cash flow should rise to 10-11 billion Swiss francs as efficiency improves, supporting the balance sheet and dividends
** JPM says valuation looks attractive near 15-year lows, leaving scope for a re-rating as earnings growth improves
** Out of 22 analysts that cover Nestle, 10 rate the stock "buy", ​10 rate "hold" and 2​ rate the stock "sell" - LSEG data



($1 = 0.8264 Swiss francs)

 (Reporting by Basile Day)
 ((Basile.Day@thomsonreuters.com))