Nestlé: Transformation Gains Momentum, But Execution Risk Rises (Rating Downgrade)

IWA Research2.57K FollowersFollow5ShareSavePlay(12min)CommentsSummaryNestlé is downgraded to Hold as portfolio reshuffling and macro headwinds warrant a better margin of safety.NSRGY delivered solid results, beating FCF expectations and reducing net debt, despite facing margin and growth pressures from commodity inflation and currency impacts.Cost-saving initiatives, including the 'Fuel for Growth' program and major divestments, are progressing, with CHF 2 billion in savings targeted by 2026.Risks include selling assets in a weak environment, execution challenges from the pivot, and ongoing macro and competitive pressures from private labels that can accelerate following current market weakness.HJBC/iStock Editorial via Getty Images Introduction The last time I covered Nestlé (NSRGY, NSRGF), I highlighted their potential coming from the new CEO and the cost-saving program with significant workforce reductions amid ongoing macro pressure from severalThis article was written byIWA Research2.57K FollowersFollowI've been researching companies in-depth for over a decade, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help me provide useful content for readers. After writing my own blog for about 3 years, I decided to switch to a value investing-focused YouTube channel, where I researched hundreds of different companies so far. I would say my favorite type of company to cover are metals and mining stocks, but I am comfortable with several other industries, such as consumer discretionary/staples, REITs and utilities.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.