On Friday, the broker Credit Suisse upgraded its rating on Nestle from ‘underperform’ to ‘neutral’. The Credit Suisse analyst has also raised its target price for the share from 93 CHF to 103 CHF.
Diving into Nestlé’s coffee business – which accounts for about 25% of the group’s profits – the broker said it expects a step-up in this category’s organic sales growth this year, driven by a reversal of market share losses in capsule coffee (due to the rollout of the Starbucks brand) and the absence of price deflation in soluble coffee. Nestle closed on Friday at 109.02 CHF and has a dividend yield of 2.47%. Nestle has increased its dividend for 23 consecutive years. Please note that Nestle owns a 23% stake in one of the few European dividend aristocrats L’Oreal.
Last week, Nestle reported full-year results for 2019, highlighted by a 3.5% organic growth and a 1.2% sales increase. The outlook is positive. The CEO stated:” Growth can accelerate above 3.5% but in a year or two and ultimately achieve a 4% to 6% goal”.
