BUY NESTLE!!!Easy buy opportunity presented to us with Nestle. Safe to ride this to all time highs and beyond
NESR trade ideas
Flight to Safety?It looks like Wave 5 could be in and we are getting the bounce of the Fibonacci Speed Fan and POC level. The Swiss Franc is also crowded short, keep an eye on this stock as it has bounced perfectly from the expected levels. One to keep an eye on, as the market looks to derisk from tech after the expected sell off.
Kennedy and Nestlé: The Beginning of a New Era for the Industry?Nestlé (Ticker AT: NESN.US) is looking to calm market fears following criticism from Robert F. Kennedy Jr. appointed by Donald Trump as the new U.S. health chief. Kennedy, known for his stance against packaged foods, has used his platform to question products such as Kellogg's (Ticker AT: K.US) Fruit Loops cereals as part of his “Make America Healthy Again” campaign. However, Nestlé says it shares principles with Kennedy, particularly in terms of improving agriculture and nutrition.
Steve Presley, president of Nestlé in North America, clarified that Kennedy's concern is more about regenerative and clean agriculture, an approach that Nestlé has supported for years. This stance highlights the company's commitment to innovation in health, an effort that began in 2019 when it started ranking its products by nutritional value.
Technical & Fundamental Aspect
Looking at the monthly chart it is palpable the steady fall in value over the last 2 years from 129 francs to 76.64 francs where it is currently trading. It is important to note that like all companies listed on the Swiss index, it has suffered from the strength of the franc in its conversion of foreign earnings. Looking at quarterly results its data has been relatively stable except for the post-pandemic earnings period in 2021 which was arguably one of the best for companies in the food and beverage sector. Subsequently the net has remained relatively stable despite criticism and economic sanctions.
Looking at the chart you can see a bearish channel started in 2022 to date. At the moment it is located at the bottom of this channel. A bearish oversold signal was marked on November 13. Currently the POC is around 83-84 francs. It is currently at the bottom of the channel touching the low of 76.04 francs. Looking at the average crossover it has been advancing since February 1 with the 200 average below the 100 average and the 50 average below the 100 average. In other words, the extension of this volatility from the end of October has extended the stock's downward slide very sharply.
Why is it relevant?
Nestlé's focus on health innovation and sustainable agriculture aligns with Kennedy's concerns, which could soften the relationship between the two parties, despite previous criticism of processed products.
A shift towards sustainability
Nestlé has been the subject of much criticism in the past, especially for its involvement in controversial practices, such as the marketing of milk powder in developing countries, the exploitation of natural resources and the use of unhealthy products in its offerings. However, its current focus on sustainability and health innovation reflects a clear strategy of adaptation to social and market demands. Consumers are increasingly aware of the environmental and nutritional impacts of the products they consume, and Nestlé appears to be responding to this trend.
By aligning itself with Kennedy, who promotes public health and regenerative agriculture, Nestlé may be trying to improve its image and demonstrate its commitment to more responsible practices. This strategic move seeks to mitigate past criticism and position the company as a more positive player in the food industry.
However, the real test will be in how the company implements its commitments and whether its actions actually match the ideals it is promoting. Nestlé's challenge remains to maintain this narrative over the long term, as its history is marked by controversy.
Ion Jauregui - ActivTrades Analyst
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Nestlé SA: A stock to keep foreverCompany Overview
Nestlé S.A., established in 1866 and headquartered in Vevey, Switzerland, is the world’s largest food and beverage conglomerate. Known for its extensive portfolio of iconic brands like Nescafé, KitKat, Maggi, and Perrier, Nestlé has maintained a strong presence in North America and Europe, which together account for 59% of its revenue. In addition, it is a global leader in pet food products through brands like Purina, a sector which has shown resilience and growth. While Nestlé’s stock has faced challenges recently, it continues to be a staple in long-term portfolios.
Recent Stock Performance
Nestlé's share price has declined by over 35% since its peak in 2021-2022. This underperformance relative to the market has presented a potential entry point for long-term investors. This decline in share price is attributed to external factors such as increased competition from new weight-loss products, currency exchange fluctuations, and rising global interest rates. Despite these challenges, the company’s enduring market position, particularly in emerging markets, underscores its resilience and potential for long-term growth.
Business Segments and Revenue Breakdown
1. Beverages: Revenue of $25 billion, featuring globally recognized brands like Nescafé and Nespresso.
2. Pet Care: Nestlé leads the pet food industry with brands like Purina, generating approximately $17 billion annually. The pet sector is growing as consumers increasingly seek premium products.
3. Nutrition and Health: Generating $15.3 billion, this segment includes specialized nutrition products for infants and adults.
4. Prepared Meals and Cooking Aids: With approximately $12 billion in revenue, this segment includes Maggi and other ready-to-eat meal products.
5. Dairy Products and Ice Cream: A significant segment with $11 billion in revenue, including well-known dairy brands.
6. Confectionery: With brands like KitKat, this segment contributes over $9 billion.
Investment Thesis
Nestlé stands out as a “forever stock” for several reasons:
1. Dividend Aristocrat: Nestlé has increased its dividend for 29 consecutive years, offering a current yield of approximately 3.8%. Since 2009, the company has returned CHF 181 billion to shareholders through dividends and share buybacks, a healthy mix that demonstrates Nestlé’s commitment to rewarding shareholders.
2. Global Presence and Market Share: Approximately 41% of Nestlé's revenue originates from emerging markets (Asia, Africa, South America), where there is strong demand for premium products, a growing middle class, and solid organic growth. In these regions, Nestlé continues to gain market share and expand its brand presence.
3. Pet Sector Growth: Premiumization in the pet care market offers a robust growth driver, particularly as pet owners show a high willingness to spend on quality food. This sector remains resilient, with consumers even prioritizing their pets’ needs over their own during economic downturns.
4. Currency Challenges and Inflation Resistance: Nestlé reports in Swiss Francs, making it susceptible to currency fluctuations. In 2023, for instance, North American revenue grew by 5.3% in local currencies but showed a slight decline when converted to Swiss Francs. This effect, while impacting short-term results, does not detract from the company’s overall growth potential. Nestlé’s long-standing pricing power and ability to adjust prices to maintain margins further solidify its resilience against inflation and currency volatility.
5. Resilient Business Model: Nestlé’s predictable cash flows and low-risk business model make it an attractive investment, particularly as interest rates rise. While the recent preference for high-growth tech stocks has contributed to Nestlé's undervaluation, the company’s defensive nature remains appealing in a volatile market.
Valuation and Pricing
Nestlé currently trades at a P/E ratio of approximately 18-19, reflecting its steady but unspectacular growth profile. This valuation, while fair, does not fully capture Nestlé’s strong brand portfolio, market position, or growth potential in emerging markets. The company’s ROIC has been trending upward, indicating that management is effectively deploying capital to generate returns above the cost of capital.
Nestlé’s organic growth is targeted at 4% for 2024, with EPS growth projected at 6-10% in the medium term. Should the stock price fall to a P/E ratio of 15, it could present a compelling buying opportunity for building a substantial position.
Risks and Considerations
1. Competition from Weight-Loss Drugs: Nestlé’s food business faces an emerging threat from weight-loss drugs like Ozempic, which could reduce demand for certain products. In response, the company is developing new health products to mitigate muscle loss, which may offer a future growth opportunity.
2. Currency Exchange Effects: The appreciation of the Swiss Franc against other major currencies negatively impacts reported revenue and earnings. While a short-term challenge, this effect does not impact the company’s fundamental business model.
3. Rising Interest Rates: Defensive stocks like Nestlé become relatively less attractive as interest rates rise. However, given the company’s stable cash flows and dividends, Nestlé remains a reliable choice for income-focused investors. Additionaly interest rates have been going down over the past months, so that is good.
Conclusion and Recommendation
Nestlé is a high-quality, defensive stock with a stable growth outlook and an attractive dividend profile. Its diversified product line, strong presence in emerging markets, and growth in the pet food sector make it a reliable, long-term investment option. For investors seeking stable returns and consistent dividends, Nestlé remains a strong addition to any portfolio, particularly as a counterbalance to higher-risk, growth-oriented stocks.
In conclusion, Nestlé I think is fairly valued at its current P/E ratio. Long-term investors can consider building a position gradually, potentially increasing their stake if the P/E ratio declines. While competitors like Coca-Cola and Unilever also offer stable income, Nestlé’s broader global reach, particularly in emerging markets, provides a competitive edge that may lead to superior returns over the next decade.
This information is for informational purposes only and does not constitute financial or investment advice. Always do your own research or consult a financial professional before making investment decisions.
Nestle Approaching Buy ZoneWe have taken out the Covid lows and we could enter the X phase of the WXY correction. In the longer term I do expect one last flush to the downside, but the downside does appears to be exhausted here as we are in the final phase of the 5 wave move to the downside. I'm playing this as a short term bounce of 15-25%.
Nestlé is known for its defensive qualities. In times of broader market volatility (elections and geopolitical issues) investors flock to high quality, consumer staples companies with strong brands and a reliable revenue stream. Nestlé's portfolio of well-established products in food, beverages, and health-related categories (such as its coffee brands, bottled water, and baby nutrition products) can appeal to investors looking for stability amid uncertainty.
Nestlé is known for its reliable and growing dividend, making it attractive to yield-seeking investors, especially in the approaching lower-interest-rate environments. A stable dividend yield can support the stock price, and as more investors focus on cash flow from dividends, increased buying pressure could lead to a short-term bounce.
Do what's best for you, do not copy what I am doing!
Nestlé (consumer goods): A stable company with a strong global pNestlé (consumer goods): A stable company with a strong global presence in consumer goods. It’s a defensive choice, less subject to economic fluctuations.
Rewards
Trading at 49.4% below estimate of its fair value
Earnings are forecast to grow 5.74% per year
Earnings grew by 15.8% over the past year
Pays a reliable dividend of 3.62%
Risk Analysis
Has a high level of debt
NESTLE: Is a rebound incoming?The Nestle stock is undergoing a correction phase, with the possibility of further declines into the green marked support zones. This level is marked as a strong long-term buy opportunity for investors, and price recovery is expected from this zone. Should this correction unfold as anticipated, the stock could rally to CHF107 and beyond, with potential targets at CHF115 and CHF130 in the longer term.
The CHF70-85 zone represents a key area of interest for long-term positions. This zone is supported by the 0.618 Fibonacci retracement and historical price action, making it a high-probability level where buyers are likely to step in.
This area is highlighted as the "Best Long-Term Buy Zone", offering an ideal entry point for those looking to accumulate Nestle shares for a potential rebound.
Thank you for taking the time to read my analysis.
I look forward to hearing your thoughts.
Best regards,
Mattner
No investment advice
NESN - Nestlé - NSRGYTrading at 42.9% below our estimate of its fair value
Earnings are forecast to grow 6.49% per year
Earnings grew by 15.8% over the past year
Pays a reliable dividend of 3.44%
NSN stock has been consistently outperforming expectations, showcasing impressive growth and stability. With strong financials and innovative strategies, it’s a smart investment choice for long-term gains. Highly recommended! 🙃🙃🙃🙃
I don't want to talk about all the scandals Nestle has been involved in over the past few weeks.
NSRGY Approaching Key Buy LevelsNSRGY has experienced a sharp decline, and is currently approaching an orange support level at $102.46. There is one more greedy support level below, the yellow support line at $88.33. I would monitor $102.46 for a bounce here, and I don't think it is a bad idea to buy at $102.46. However, NSRGY is having such a steep decline that I think we are likely to reach the $88.33 support level over the next few months or quarters for the best buying opportunity at the yellow support line.
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Working with anglesWorking with angles is something I see myself doing more often lately, meaning they have proven some reliability to me over time. When exactly is still quite intuitive and this publication is also an idea to further explore by other traders and so develop a competitive edge, and therefore should remain secret how to apply in further detail.
Here I look at Swiss company Nestle which always has been a high performer, at least since last recession. It price made a double bottom over the course of 2006-2009 with a top in December 2007.
From that 2009 onwards it delivers a good opportunity for bullish investors. When I see it touching an imaginary trendline I draw a line using the "Trend Angle" drawing tool. Often I discover that certain angles persist although with an offset up or down in price. Here I have drawn a 23 and 22 degree trendline with almost 10 years between them.
Long persistent trend angles objectively tell me something about strength and trend line reliability. For example, it would add weight to my decision for going short or long at this point in time.
Not saying I would go short here. This is where you can add your variables to make your own decision as a trader.
NestleThis stock has fallen out of favor these past few months. Price is trying to stabilize around the EMA's. Planning to go long at the CLOSE today. It's ranging at the moment so it may deflect off the long trend (see arrow), but regardless whether she breaks out or continues ranging, this is a decent entry.
