Nestlé Shares Stabilize as Strategic Shifts Take Hold

Nestle CH0038863350

Following a volatile period in 2025, the Swiss food and beverage conglomerate Nestlé appears to be regaining its footing. As the year draws to a close, the company's share price is showing signs of stabilization. This renewed confidence stems from two key developments: the finalization of its exit from the processed meat business and growing investor approval for the strategic direction set by its new Chief Executive Officer, Philipp Navratil. The critical question for the market is whether these moves signal a sustainable return to the company's former robust performance.

The appointment of Philipp Navratil as CEO in September has emerged as a pivotal factor in the recent share price recovery. Market participants are responding positively to his more aggressive approach to restructuring the business. His strategy, which involves cutting approximately 16,000 positions while simultaneously making significant increases to marketing budgets, has found favor with institutional investors. Dubbed a "growth-above-all" plan, its core objective is to sustainably lift organic growth above the 4% threshold.

The equity market has rewarded this decisive shift in corporate strategy. After plummeting to a low of CHF 69.90 in August amid a leadership crisis, Nestlé shares have stabilized around the CHF 78 mark. With an estimated price-to-earnings (P/E) ratio of 18 for 2026, the valuation has returned to its long-term average, suggesting that the uncertainties of the summer have largely been absorbed by the market.

Final Exit from Processed Meat Concluded

A major overhang on the stock was removed just before the Christmas holiday. Nestlé confirmed the sale of its remaining 40% stake in Herta Foods to its Spanish partner, Casa Tarradellas. This transaction completes the group's full withdrawal from the traditional processed meat segment. The move not only concludes a significant chapter in the company's history but also unlocks liquidity. It represents a consistent execution of management's stated goal to streamline its portfolio by divesting low-margin, volume-heavy business units.

February Results to Provide Crucial Test

For shareholders, the next critical milestone is scheduled for February 19, 2026, when Nestlé is set to publish its full-year financial results. This report will serve as a key test for CEO Navratil, requiring him to demonstrate that the ongoing restructuring is not merely reducing costs but is also successfully reigniting real internal growth (RIG). From a technical analysis perspective, a sustained breakout above the resistance level at CHF 80 would be viewed as the next potential buy signal, potentially paving the way for a move toward CHF 85.