Nestle Model Update: Expect LFL to decelerate in H2, weighing on valuation multiple

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Nestle Model Update: Expect LFL to decelerate in H2, weighing on valuation multiple

J P M O R G A N Europe Equity Research

24 July 2026

Nestle Neutral

NESN.S, NESN SW

Model Update: Expect LFL to decelerate in H2, Price (23 Jul 26):CHF79.99

weighing on valuation multiple Price Target (Dec-27):CHF90.00

Following Nestle’s Q2/H126 results, we update our model, raising EPS 26E by European Food Producers,

c1% on FX. We leave LFL 26E unchanged at +3.2%, however, with a slightly lower Household & Personal Care

RIG contribution of +1.4% (vs prior +1.5%) and better pricing of +1.8% (from Products, Beverages & Tobacco

+1.7%). Whilst Q2 was weighed by a delisting impact in Europe and pet de-stock Celine Pannuti, CFA AC

in N. America, EMs were strong, and we see risk of RIG decelerating from this (44-20) 7134-7123

level in H2 as comparatives toughen. With pricing slightly ahead of our celine.pannuti@jpmorgan.com

expectations in Q2, and some selective further pricing taken (in AOA and US Edward G Hockin

coffee), which may bode for a more moderate deceleration, we nevertheless expect (44-20) 7742-6937

edward.hockin@jpmorgan.com

an easing going forward on relatively benign commodity costs. We leave J.P. Morgan Securities plc

underlying trading operating margin unchanged at 16.4% for the year. Net-net,

with a softer organic sales exit rate to this year (JPMe H2 LFL +2.9% with RIG Specialist Sales contact details:

+1.3% and pricing +1.6%), visibility on reconnecting 4%+ MT topline remains Olivia Petronilho - Specialist Sales -

low, and having outperformed food peers YTD, we see limited scope for re-rating European Consumer

of the shares at 15x PE 27E ex-L’Oreal and 11x EV/EBITDA 27E. (44-20) 3493-3709

olivia.b.petronilho@jpmorgan.com

• Changes to estimates.