Nestle SA received a rare negative rating as Morgan Stanley turned bearish on the consumer-goods giant, adding to a recent turn in the tide of analyst opinion.
Ryan Detrick, chief market strategis of Carson Group, joinss BNN Bloomberg and talks about his take on the outlook for the bull market in stocks.
Shares in the maker of Kit Kat fell as much as 1.2% in Zurich to the lowest since February 2019 after analyst Sarah Simon cut her recommendation to underweight from equal-weight and reduced her price target to the least among analysts tracked by Bloomberg. Nestle shares are down 10% this year through Friday’s close as the snack maker struggles to win back shoppers. The company last month appointed Laurent Freixe as chief executive officer, replacing Mark Schneider, who had been in the role for almost eight years. Schneider, once popular among investors, had seen his star fade as growth concerns led to his abrupt exit.
Simon said in a note that Nestle may deserve a premium valuation over the medium term, but noted that the stock was already pricing in a turnaround in the nearer term. She sees potential for high-single-digit or even low-double-digit cuts to consensus earnings-per-share expectations for the 2025 and 2026 fiscal years.
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