Nestlé: Oddo still a buyer, but cuts target price.

(CercleFinance.com) - Oddo Securities analysts say the Swiss agri-food giant's share is "fairly solid, pending the return of inflation".
While maintaining their buy rating, they have actually cut their target price for the share from 85 Swiss francs to 80 Swiss francs.

Indeed, the group's FY accounts, which were unveiled yesterday, disappointed regarding organic growth, which reached 3.2%, while this was expected to reach 3.4%. However, "the results are close to expectations," says.

Oddo, which adds that: "The only real disappointment comes from the poor performance of the Skin care business, even though this should not be repeated.

Indeed, Nestlé wants to be cautious for 2017, forecasting organic growth of just 2% to 4%. However, this forecast is "perhaps too cautious," suggests Oddo, with the group giving itself some leeway on this.

"Nestlé's main challenge will be a return of inflation in Europe, even though at present this seems unlikely in the first half of 2017. As such, the second half of 2017 may bring some pleasant surprises, particularly in Eastern Europe,” Oddo says.

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