While Nestlé shares fell slightly from daily highs, they were still positive at the end of the trading session.
Traders report speculation that the Vevey food company may use the half-year results release to lower the bottom line for organic sales growth this year. The inclusion of the papers in the “Most Preferred List” by Kepler Cheuvreux for European consumer goods manufacturers is proving to be trend-enhancing, it goes on to say.
At the closing bell Nestlé name gained 1.14 percent to 74.68 francs. The daily highs are even at 74.78 francs. By contrast, the market as a whole (SMI) recovered by just over 1 percent after the setback of the previous day.
The originator of speculation surrounding a possible adjustment to Nestlé’s growth target this year is Jon Cox of Kepler Cheuvreux. He reports on indications that organic growth could have accelerated further in the current second quarter. Between the beginning of January and the end of March, the food company achieved organic sales growth of 2.8 percent, slightly exceeding experts’ expectations.
Cox therefore believes that on 26 July, Nestlé will narrow the target range for organic sales growth from originally 2 to 4 percent to 3 to 4 percent.
All the more the Kepler Cheuvreux analyst sees a favorable entry opportunity in the recent price decline. He continues to recommend the Nestlé shares at a price target of 90 francs and puts them on the “Most Preferred List” for European consumer goods manufacturers.
It was not until Tuesday morning that Nestlé’s securities traded at 72.92 francs in early trading to its lowest level this year. With a minus of 11 percent since the end of December, the heavyweight division is one of the weaker stocks from the SMI.