Easing Headwinds, Summer Weather to Boost Nestlé's Q3 Real Internal Growth, UBS Says

MT Newswires · 2d ago
07:31 AM EDT, 09/29/2026 (MT Newswires) -- UBS Global Research expects Nestlé's (NESN.SW) upcoming third-quarter trading update to show a "modest" sequential rise in quarterly real internal growth, or RIG, supported by easing pressures and summer beverage demand. "This robust RIG performance against a challenging basis of comparison should reflect: 1) easing adverse impacts from the Infant Milk Formula recall, Petcare destocking in the US, customer dispute in Europe and Starbucks' price elasticity; 2) limited changes in trading conditions in Q3 vs Q2, as in, still weak consumer environment in the US and challenging retail backdrop in Europe but no marked sequential deteriorations," according to a Monday note. The research firm forecasts Nestlé's waters and premium beverages division will contribute 20 basis points to group RIG for the quarter, bolstered by a warm European summer and a favorable comparison. Against this backdrop, analysts project third-quarter organic group sales of 3.6%, broadly aligned with the second quarter's 3.7% and above the Visible Alpha consensus of 3.2%. UBS also expects RIG of 1.9%, reflecting an uptick from the previous quarter's 1.8%. The research firm's full-year 2027 EPS estimate was also lifted by 1% to account for a "more favorable" currency effect. Ahead of the company's nine-month sales update on Oct. 22, UBS lifted the neutral-rated stock's price target to 81 francs from 80 francs.