Nestle's Investor Seminar Largely in Line With a Confident Midterm Outlook; Shares Fairly Valued

Nestle's Investor Seminar, which was hosted in Barcelona this year, provided a confident message to investors, with midterm organic sales growth and profit guidance largely in line with our expectations and consensus. More specifically, Nestle now expects annual underlying EPS growth of 6% to 10% in constant currency and underlying trading operating profit margin range of 17.5% to 18.5% by 2025, both of which are in line with our estimates though at the low end (7% EPS growth and 17.8% trading margin by 2025 in our model). For 2022, Nestle now expects organic sales growth between 8% and 8.5% and an underlying trading margin of 17% (versus 7.6% and 17% in our model respectively). We do not expect to change our CHF 109 fair value estimate for Nestle materially. Shares look fairly valued.