Nestlé Shares Face Critical Test Amid Restructuring Drive

Nestle CH0038863350

The Nestlé share price has entered the 2026 trading year with a marginal gain, yet palpable market skepticism persists. Following a turbulent 2025 defined by leadership crises and strategic shifts, the global food giant is under intense pressure to deliver. The central question for investors is whether the new executive team can translate its promised radical measures into profitable outcomes with sufficient speed.

The stock's current valuation reflects the profound disruptions of Q4 2025. The company is navigating the most aggressive restructuring phase in its recent history, triggered by the abrupt dismissal of former CEO Laurent Freixe in September for breaches of the company's code of conduct. His successor, Philipp Navratil—previously head of the Nespresso business—now faces the formidable task of restoring investor confidence. The equity remains approximately 30% below its five-year peak.

A Cautious Start in Swiss Trading

In Swiss trading this Friday, Nestlé shares were up 0.4%, slightly outperforming the benchmark SMI index, which advanced 0.3%. Market observers view this as a tentative, initial sign of stabilization following the high volatility witnessed throughout 2025. The overall picture, however, is mixed. While the share price finds footing in Switzerland, subsidiary Nestlé India declined by 1.18%. This divergence underscores the persistent tension in critical emerging markets, which are essential for the group's growth.

Should investors sell immediately? Or is it worth buying Nestle?

Scrutiny on Revenue Quality

Beyond cost concerns, revenue trends continue to cause unease. For the first nine months of 2025, sales fell by 1.9% to CHF 65.9 billion. The reported organic growth of 3.3% was primarily driven by price increases, not higher sales volumes. This pattern points to enduring weakness in the core business, an issue that cannot be resolved by cost-cutting measures alone.

The CHF 3 Billion Efficiency Push

Investor focus is now squarely fixed on the execution of the cost-saving program unveiled in October. To defend profit margins, management is wielding the axe on an unprecedented scale:

• Global Workforce Reduction: A total of 16,000 positions are being eliminated.
• Structural Impact: The cuts encompass 12,000 administrative roles and 4,000 jobs in production and logistics.
• Financial Target: The plan aims to achieve cumulative savings of 3 billion Swiss francs by the end of 2027.

The year 2026 represents a decisive proving ground for CEO Navratil. After a cumulative share price decline of around 40% since 2022, mere stabilization is unlikely to satisfy shareholders. The trajectory of the stock in the coming quarters will depend directly on whether the promised efficiency gains can be realized without further deterioration in top-line performance.