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    NESN   CH0038863350

NESTL╔ S.A.

(NESN)
  Report
Delayed Swiss Exchange  -  11:30:17 2023-02-07 am EST
110.04 CHF   -1.29%
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Baby formula maker Perrigo buying Nestle's Good Start brand, Wisconsin plant

11/01/2022 | 03:04pm EST
Birds are seen on the logo of generic drugmaker Perrigo Co outside their new factory in the city of Yeruham

NEW YORK (Reuters) - Infant formula manufacturer Perrigo Company Plc said on Tuesday it is buying the Good Start brand and a Wisconsin plant that makes the product from Nestle SA, as U.S. retailers recover from shortages of the good.

The deal is part of a $170 million investment that Perrigo is making in its U.S. infant formula manufacturing. The investment includes $60 million to expand the plant's capacity by roughly 100 million eight-ounce bottles each year.

U.S. retailers have been rationing formula and putting it behind lock-and-key due to a severe shortage stemming from the closure of a Sturgis, Michigan, Abbott Laboratories plant earlier this year.

The shortage has improved in recent months, with about 87% of powder baby formula in stock the week ending Oct. 23, up from about 69% three months ago, according to market research firm IRI.

Perrigo, which makes 17 store-brand infant formulas including for Walmart Inc and Target Corp, could not meet consumer demand, leading to the deal, the company said in a news release. The company's other manufacturing facilities in Ohio and Vermont have been running at 115% of capacity.

Perrigo also works as a contract manufacturer for new formula brands, including Bobbie.

Good Start is a relatively "small player" in the U.S. infant formula market, which is dominated by Abbott's Similac and Reckitt Benckiser Group Plc's Enfamil, said Tarun Malkani, the CEO of Nestle's Gerber Product's Company, in an interview.

"We invested in the U.S. in particular for years," Malkani said. "We never got the return in terms of scale or potential we hoped for."

Nestle has sent cans of specialized Alfamino formula and NAN from Europe to help try to alleviate the shortage earlier this year.

Perrigo will supply Nestle with Good Start formula so the company can fulfill its contracts with the Women, Infants and Children program, which helps poor families afford the item.

(Reporting by Jessica DiNapoli in New York; Editing by Matthew Lewis)

By Jessica DiNapoli


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ABBOTT LABORATORIES 0.42% 111.285 Delayed Quote.1.82%
NESTLÉ S.A. -1.29% 110.04 Delayed Quote.4.05%
PERRIGO COMPANY PLC 0.03% 36.285 Delayed Quote.6.45%
RECKITT BENCKISER GROUP PLC -0.52% 5754 Delayed Quote.0.52%
TARGET CORPORATION -0.28% 173.34 Delayed Quote.18.60%
WALMART INC. -0.95% 139.355 Delayed Quote.-0.06%
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Analyst Recommendations on NESTL╔ S.A.
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Financials
Sales 2022 94 824 M 102 B 102 B
Net income 2022 11 414 M 12 307 M 12 307 M
Net Debt 2022 43 670 M 47 087 M 47 087 M
P/E ratio 2022 26,3x
Yield 2022 2,67%
Capitalization 308 B 332 B 332 B
EV / Sales 2022 3,70x
EV / Sales 2023 3,62x
Nbr of Employees 276 000
Free-Float 97,9%
Chart NESTL╔ S.A.
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NestlÚ S.A. Technical Analysis Chart | MarketScreener
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Technical analysis trends NESTL╔ S.A.
Short TermMid-TermLong Term
TrendsNeutralNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 25
Last Close Price 111,48 CHF
Average target price 119,95 CHF
Spread / Average Target 7,60%
EPS Revisions
Managers and Directors
Ulf Mark Schneider Chief Executive Officer & Director
Franšois-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
Paul Bulcke Chairman
Stefan Palzer Chief Technology Officer & Executive VP
Magdi Batato Head-Operations & Executive Vice President
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