Nestle shares: Price analysis before buying or selling

Can I receive dividends when I buy Nestle shares?

Yes - Access to dividends

What is Nestle's capitalisation?

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ISIN code: CH0038863350

Ticker: SWX: NESN

Index or market: SMI

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Elements to consider before selling or buying Nestle shares

Analysis N°1

The group continues to focus its activities towards nutrition and well being. We would therefore monitor operations completed in this area that represent major growth opportunities for this group.

Analysis N°2

The same is true for certain specific sectors undergoing full expansion such as coffee capsules that Nestle is increasingly developing.

Analysis N°3

From a geographical point of view, we recommend you monitor the development of Nestle’s activities in emerging markets such as China and India.

Analysis N°4

It is also recommended to follow Nestle’s competitors and in particular the growing competition from major shop brands that are overshadowing this company by taking parts of its market share.

Analysis N°5

Finally, the strengthening of regulations leads to higher costs relating to product standardisation and should therefore be followed closely.

Analysis before buying or selling Nestle shares

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General presentation of Nestle

The Nestle group is currently the world leader in the food sector. Its turnover is achieved through the sale of drinks, dairy and ice cream products, prepared meals and seasonings, pharmaceutical products, nutrition and well being products, animal food, chocolates, biscuits and confectionary.

These products are sold worldwide under different brands some of which are household names.

The Nestle share price is currently quoted on the Main Standard market of the SIX Swiss Exchange in Switzerland. The Nestle Company is also integrated in the composition of the FTSE Eurotop 100 European Stock Market Index and is therefore one of the top 100 European companies relating to capital.

Photo credits: ©conectus/123RF.COM

The major competitors of Nestle

We now propose to discover the main competitors of the Nestlé Group in its sector of activity with a quick presentation of the biggest players in the sector, likely to take market share.

Pepsico

First of all, we will follow PepsiCo, formerly known as Pepsi-Cola Company, which is an American multinational specialising in the food sector. It is particularly known for its drinks and snack products. But it is also one of the world's leading food companies and the largest in North America in terms of turnover. The group currently employs nearly 285,000 people worldwide.

Danone

Of course, the French multinational Danone is also a major competitor of Nestlé. This company is listed on the Euronext market of the Paris stock exchange and is part of the CAC 40 stock index. The company was formed by the merger of several others in 1973, including the Gervais Danone group and the Boussois-Souchon-Neuvesel group or BSN. Today, the Danone group is the leader in the food sector in France, but also number three in this sector in Europe.

Unilever

The Dutch-British multinational Unilever is a company that operates in about a hundred countries and is one of the world leaders in the food industry. The group is also the world's leading producer of ice cream and tea. More specifically, the Unilever group offers products in the beverage and ice cream, food, personal care and home care segments. It employs over 169,000 people.

Lindt & Sprüngli AG

This other company is a chocolate manufacturer based in Kilchberg in the canton of Zurich in Switzerland and operates several production sites in Switzerland, Germany, France, Italy, the United States and Austria.

Mondelez International

Finally, this American multinational food company, which is present in the biscuit and chocolate segments in many countries around the world, should also be followed closely. It is one of the main players in the food sector in the world in terms of sales volumes. Formerly a subsidiary of the Altria Group under the name Kraft Food, it was spun off from the Altria Group in 2007 and took its current name in 2012 after the spin-off of its North American operations. Today, the Mondelez International Group markets its products in nearly 165 countries around the world and has manufacturing and processing facilities in more than 58 different countries.

The major partners of Nestle

To conclude here are some recent partnerships implemented by the Nestle Group.

Coca-Cola

In 2001 the Nestle Group allied themselves with the Coca-Cola Group to create a joint enterprise in the tea sector, named Beverage Partners Worldwide, or BPW, which notably led to the creation of the Nestea brand range of tea products. But recently the two companies decided to end this joint enterprise by making Nestea an independent company in the beginning of 2018.

Alibaba

In 2016, with the aim of developing its market in the Asian sector Nestle became a partner of the Chinese e-commerce giant Alibaba by selling some of its products on their online sales platforms.

Enterome

Finally and more recently in 2017, the health subsidiary of Nestle, Nestle Health Science, announced the implementation of a joint enterprise with the French company Enterome for the development of chronic liver and intestine inflammatory illness diagnostics.

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The factors in favour of a rise in the Nestle share price:

First of all, of course, the Group's positioning as one of the leaders in the global food industry. This position is due in particular to the many brands owned by the group and which we have discovered in detail above.

On the other hand, the Nestle Group relies heavily on a strategy of innovation and advanced research. Its R&D investment capabilities enable it to react very quickly to new consumer needs and help it to offer products that meet those needs before the competition does.

Finally, it is of course well known that Nestle enjoys a very comfortable financial position and an assured profitability that gives investors a high degree of reassurance.

For the years to come, various opportunities are available to the Nestle Group and could tip the forecasts in favour of a further rise in its share price on the stock market. In particular, the efforts made by the company in terms of developing its activities and products in the field of nutrition and well-being could rapidly bear fruit in a consumer society that is increasingly attentive to the quality of life.

Nestle also continues to enjoy its leading and pioneering position in the pod coffee market with a marketing strategy that has not yet delivered its full potential and that should continue to appeal to the public in the years to come.

Finally, it is known that the Nestle Group is currently focusing its efforts on emerging markets, particularly China and India, which could bring it many long-term benefits.

The factors in favour of a drop in the Nestle share price:

Firstly, the group has recently suffered greatly from the health scandal concerning the presence of horse meat in some of its prepared products. Although the fallout from this episode is fading over time, it has somewhat tarnished Nestle's brand image.

The Group also faces some significant challenges and threats to its continued existence. The greatest threat, of course, comes from competition from the other retail giants, which is becoming increasingly strong, with market shares that are evolving negatively for Nestle to the benefit of its rivals.

Nestle also needs to find ways to reduce or at least maintain its current manufacturing and production costs despite the strict compliance rules that are becoming more and more burdensome, particularly for food products, and in an increasingly competitive market. Finally, production costs are also threatened by global water scarcity, leading to higher transport and treatment costs and reduced competitiveness.

In order to maintain its leadership over the long term and ensure that its share price continues to rise, Nestle must ensure that effective solutions are in place to address these challenges. For your part, and as an investor, you will of course have to keep an eye on the decisions taken by the Group, but also on the various innovations that could generate sufficient income to make up for these equally significant losses.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How many shareholders does the Nestle Group have?

The Nestle Group currently has around 160,000 registered shareholders. However it is important to take into account the registration applications currently being processed, the holders of indirect shares in the form of certificates in the USA and the economic beneficiaries of shares held in trust which come to a combined total of over 250,000 shareholders for this group in 2020. Of course, the number of shareholders continues to grow in number.

When is the dividend payment date for Nestle shares?

As with many companies quoted on the stock exchange the Nestle Group proceeds with the payment and distribution of dividends on its shares once a year. This payment actually occurs after its approval at the Annual General Meeting. It is however the Board of Directors that is responsible for fixing the dividend payment date. This date is generally a few days after the Annual General Meeting.

Since when have Nestle shares been quoted on the Stock Exchange?

On the 17 March 1873 the shares of the Anglo-Swiss Condensed Milk Co, one of the original two companies of Nestle, was quoted for the first time on the Zurich stock exchange. After the merger of this company with Henri Nestle SA the shares of the new company, Nestle & Anglo-Swiss Condensed Milk Co., were quoted for the first time on the 25 October 1905 on the Zurich Stock Exchange. They are now quoted on the SIX Swiss Stock Exchange.

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Analysis before buying or selling Nestle shares