NSRGY - Nestlé lands bull ratings from HSBC after new outlook flips the script

2023-08-02 13:31:19 ET

Nestlé S.A. ( OTCPK:NSRGY ) landed an upgrade from HSBC Global Research on Wednesday to a Buy rating from Hold after the consumer products company topped first-half results and issued an encouraging outlook.

Analyst Jeremy Fialko said Nestlé's volume growth has been held back in recent quarters by a combination of its own rationalization initiatives and capacity constraints. The Switzerland-based company was also noted to have held back on marketing in an effort to protect margins. However, a number of the company's capacity issues are expected to be resolved in 2024, and a significant step-up in marketing is anticipated to benefit volume growth. "Nestlé’s pricing was also more gradual than a number of its peers and so this should still make a meaningful contribution to sales growth in 2024," observed Fialko.

Underpinning the new bull rating, HSBC thinks Nestlé can deliver organic sales growth ahead of peers, accompanied by rising gross margins and heavy marketing investment.

Shares of Nestlé S.A. gained 0.85% in Wednesday afternoon trading. The stock has poked out a 5% gain for the year.

More on Nestlé S.A.

• Nestle: H1 2023 Results Are Out, Optimization Is On Track
• Nestle earnings call transcript
• Relative strength index and moving averages
• Seeking Alpha's Quant Rating for Nestle

For further details see: