Nestlé Stock Falls After BofA Downgrade on Petcare Weakness
TLDR
- Bank of America downgraded Nestlé from Buy to Neutral, cutting its price target from CHF 94 to CHF 89
- Nestlé stock fell 1.8% in Switzerland following the downgrade
- North America Petcare, roughly 13% of group sales, is losing market share in both cat and dog food
- Cocoa prices are up nearly 70% and coffee up 15% since April, eroding the expected cost tailwind
- Nestlé reported a ~31% drop in net profit in its July 23 H1 results due to impairment charges
Nestlé stock slipped 1.8% in Switzerland on Monday after Bank of America Securities cut its rating from Buy to Neutral and lowered its price target to CHF 89 from CHF 94.
The stock was trading around CHF 79.23 at the time of the move.
The downgrade lands just days after Nestlé’s July 23 first-half results, which showed net profit falling roughly 31% due to impairment charges.
BofA analysts, led by Nicolas Ceron, pointed to North America Petcare as the core problem. The segment makes up about 13% of Nestlé’s total group sales — its largest category-region combination.
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