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If you are wondering whether Nestlé shares are offering fair value at around CHF 82.90, or if the current price is out of line with the fundamentals, this article walks through the key signals you might want to consider.
The stock recently closed at CHF 82.90, with returns of 5.7% over 7 days, 15.4% over 30 days and 8.5% year to date, while the 1 year, 3 year and 5 year returns stand at a 2.0% decline, 13.8% decline and 1.5% decline respectively.
Recent headlines around Nestlé have focused on long running themes such as its global brand portfolio, consumer demand patterns across categories like coffee and pet care, and ongoing cost and efficiency measures. These updates help frame how investors are thinking about the balance between growth potential and risk in the current share price.
On our 6 point valuation checklist, Nestlé scores a 4 out of 6 valuation score. This suggests there are several areas where the stock appears attractively priced and a couple that warrant closer scrutiny. Next, we compare the results from different valuation methods before finishing with an even richer way to think about what the shares could be worth.
Find out why Nestlé’s -2.0% return over the last year is lagging behind its peers.
A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back to a present value.
For Nestlé, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in CHF. The latest twelve month free cash flow is about CHF 10.3b. Analyst inputs are available for several years ahead, and Simply Wall St extrapolates beyond those, with projected free cash flow of CHF 12.3b in 2030 and further estimates running out to 2035.
Adding these discounted cash flows together gives an estimated intrinsic value of CHF 146.65 per share, compared with the recent share price of CHF 82.90. On this model, that implies the shares trade at roughly a 43.5% discount to the DCF estimate. This suggests the price sits well below this particular assessment of underlying cash flow value.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Nestlé is undervalued by 43.5%. Track this in your watchlist or portfolio, or discover 228 more high quality undervalued stocks.
NESN Discounted Cash Flow as at Feb 2026
Story continues
For a profitable company like Nestlé, the P/E ratio is a useful shorthand because it links what you pay per share to the earnings that support that price. It helps you see how much the market is currently willing to pay for each unit of profit.
What counts as a “normal” or “fair” P/E depends a lot on growth expectations and risk. Higher expected earnings growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually calls for a lower one.
Nestlé currently trades on a P/E of 23.61x. That sits above the broader Food industry average of 16.27x, but below the peer group average of 32.31x. Simply Wall St also calculates a Fair Ratio of 28.94x for Nestlé, which reflects a more tailored view of what the P/E might be given factors such as earnings growth profile, industry, profit margins, market size and company specific risks.
This Fair Ratio goes further than a simple comparison with industry or peers because it folds these company specific factors into one benchmark rather than relying on broad group averages. Comparing 23.61x with the Fair Ratio of 28.94x suggests Nestlé shares may be trading below this customized P/E reference point.
Result: UNDERVALUED
SWX:NESN P/E Ratio as at Feb 2026
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Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you set out your own story about Nestlé, link that story to specific forecasts for revenue, earnings and margins, translate those forecasts into a Fair Value, then compare that Fair Value with the current price. The Narrative is automatically refreshed as new news or earnings arrive. This means you can see, for example, how one Nestlé Narrative on the Community page might anchor around a Fair Value of about CHF 103.55 and a more cautious one around CHF 87.69, giving you a clear, easy frame for deciding whether the current price lines up with your view.
Do you think there’s more to the story for Nestlé? Head over to our Community to see what others are saying!
SWX:NESN 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NESN.SW.
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