Swiss food giant Nestlé’s shares drop to lowest level since early 2019
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Swiss food giant Nestlé’s shares drop to lowest level since early 2019
The decline in Nestlé shares accelerated towards the end of the week. On Friday afternoon, the food giant’s shares fell to a level not seen since early 2019.
At around 4.45pm, Nestlé shares on the Swiss stock exchange had dropped by 3.2%, trading at just CHF82.64 ($97.22). The shares have been in a downward spiral since the beginning of the year, when they were still valued at around CHF100 in January.
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The main trigger for Friday’s price slide was a pessimistic analyst report from UBS. The expert lowered both their profit forecasts and the price target for the shares, suggesting that the food company is likely to revise its 2024 forecasts downwards.
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A share trader told the news agency AWP on Friday afternoon that several analysts had recently made significant cuts to their estimates and share price targets. For example, Morgan Stanley analysts downgraded their rating to “underweight” earlier this week. Additionally, another market observer noted that some “safe-haven” purchases of this defensive stock from the weekend are now being withdrawn.
According to the trader, the market is starting to recognise that many of the French-Swiss group’s problems are self-inflicted. Competitors like Danone are likely to report significantly better results. At the end of August, Nestlé made the unexpected decision to replace its CEO, and now the Nestlé veteran Laurent Freixe has been brought in to get the company back on track.
Translated from German by DeepL/sp
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