Nestlé’s Strategic Overhaul Fails to Ignite Investor Enthusiasm

The food and beverage conglomerate Nestlé is undergoing a significant transformation under its new Chief Executive, Philipp Navratil, who took the helm in September 2025. His aggressive restructuring plan, designed to bolster profitability in an inflationary climate, has so far failed to generate substantial market optimism. Recent commentary from analysts at JP Morgan has further tempered expectations for a rapid share price recovery.

Despite the announced strategic shifts, Nestlé's equity performance reflects persistent investor caution. The shares are currently trading at 83.10 euros, having lost approximately 3% of their value over the past month. This price level represents a decline of more than 12% from the stock's 52-week high of nearly 95 euros, underscoring the ongoing pressure on the company's valuation.

This skepticism is echoed in the research community. JP Morgan analyst Celine Pannuti recently reaffirmed a "Neutral" rating on the stock. While she anticipates a solid comparable growth rate of about 3% for the final quarter, she indicated that the current signals are insufficient to warrant an upgrade to a buy recommendation. The firm maintained its price target of 90 Swiss francs.

Navratil's Comprehensive Restructuring Plan

CEO Navratil has moved swiftly to implement a radical corporate overhaul, with a sharp focus on cost management to protect margins.

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

Key elements of the new strategy include:

• Substantial Workforce Reduction: The company plans to cut roughly 16,000 positions globally over a two-year period, with 12,000 of those reductions concentrated in administrative functions.
• Increased Savings Target: Nestlé has raised its cost-saving ambition, now aiming to achieve 3.0 billion Swiss francs in savings by the end of 2027, up from a previous goal of 2.5 billion.
• Operational Turnaround: A positive sign emerged in the third quarter, where real internal growth (RIG) returned to positive territory at 1.5%.

Market observers view these steps as necessary to enhance operational efficiency. Early indications suggest the plan is yielding some results, with organic sales growth accelerating to 4.3% in Q3.

February Results in the Spotlight

For investors, the next critical milestone will be the publication of Nestlé's full-year results in February. Company leadership has set targets for approximately 3.3% organic growth and an underlying trading operating profit margin of at least 16% for the fiscal year. A sustained recovery in the share price towards its previous highs is likely contingent on Navratil demonstrating that the billions in savings are translating directly and consistently into improved profitability.