Nestlé S.A. : The underlying trend is in force again
Published on 11/20/2018
at 08:14 am EST
Share
BUY
Stop-loss triggered
Entry price
Target
Stop-loss
Potential
CHF 83.42
CHF 88
CHF 81.1
+5.49%
Shares in Nestlé show a positive technical chart pattern over the medium term, which suggests that the rising trend should be followed.
Summary
● In a short-term perspective, the company has interesting fundamentals.
Strengths
● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.
● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 78.78 CHF
Weaknesses
● The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.
● Technically, the stock approaches a strong medium-term resistance at CHF 85.4.
● According to forecast, a sluggish sales growth is expected for the next fiscal years.
● Financial statements have repeatedly disappointed market stakeholders. Most often, they were below expectations.
● The company's enterprise value to sales, at 3.08 times its current sales, is high.
● With a 2018 P/E ratio at 22.6 times the estimated earnings, the company operates at rather significant levels of earnings multiples.
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This super rating is the result of a weighted average of the rankings based on the following ratings: Global Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
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Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite), and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of the rankings based on the following ratings: Capital Efficiency (Composite), Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
ESG MSCI
ESG MSCI
The MSCI ESG score assesses a company’s environmental, social, and governance practices relative to its industry peers. Companies are rated from CCC (laggard) to AAA (leader). This rating helps investors incorporate sustainability risks and opportunities into their investment decisions.
