Nestlé: Morgan Stanley upgrades to 'equal weight'.
(CercleFinance.com) - On Wednesday, Morgan Stanley upgraded Nestlé shares from 'underweight' to 'equal weight', albeit with a target price reduced from 80 CHF to 76 CHF.
Following the stock's recent significant underperformance, the analyst believes that his negative investment thesis on the food giant has now materialised.
While he regrets that the company's last Investor Day did not provide sufficient opportunity to review the strategic mistakes made, the broker acknowledges that Nestlé has admitted to losing market share.
And while it considers the company's pipeline of new products to be "impressive", Morgan Stanley believes that the targets for 2025 and 2026 still present risks, and does not see the company achieving its medium-term targets before 2027.
The professional believes, however, that these factors are now more than priced in, with a valuation that reflects the market's increased caution about the company's prospects.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as decision-making aids for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
Following the stock's recent significant underperformance, the analyst believes that his negative investment thesis on the food giant has now materialised.
While he regrets that the company's last Investor Day did not provide sufficient opportunity to review the strategic mistakes made, the broker acknowledges that Nestlé has admitted to losing market share.
And while it considers the company's pipeline of new products to be "impressive", Morgan Stanley believes that the targets for 2025 and 2026 still present risks, and does not see the company achieving its medium-term targets before 2027.
The professional believes, however, that these factors are now more than priced in, with a valuation that reflects the market's increased caution about the company's prospects.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as decision-making aids for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.