Can Nestlé (SWX:NESN) Balance Efficiency With Innovation Amid Deep Cost Cuts and Restructuring Plans?

In October 2025, Nestlé announced plans to eliminate 16,000 jobs and raised its cost-savings target to CHF 3.0 billion by 2027, alongside reporting third quarter organic sales growth of 4.3% and stronger than expected recovery in real internal growth. The workforce reduction, largely targeting white-collar roles, signals a broad restructuring effort under new CEO Philipp Navratil, aimed at strengthening efficiency and sustaining performance amid currency headwinds and ongoing margin pressures. We'll explore how Nestlé's global cost-cutting drive and renewed focus on efficiency could influence its investment appeal and growth outlook.

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Nestlé Investment Narrative Recap

Nestlé’s long-term appeal often centers on its ability to adapt its global portfolio and drive efficiency while capitalizing on secular trends in health, coffee, and pet care. The recent cost-cutting program, including the plan to eliminate 16,000 jobs, is designed to address ongoing margin pressures but does not fundamentally change the most important near-term catalyst: improvement in organic sales growth, nor does it fully remove the risk from volatile commodity costs and foreign exchange movements.

Among the latest announcements, Nestlé’s reaffirmed guidance for organic sales growth improvement in 2025 is particularly relevant, as it suggests that recent restructuring efforts are not expected to disrupt near-term revenue momentum. This provides some reassurance for investors watching for signs that operational changes could weigh on performance just as real internal growth is beginning to rebound.

But while these steps show progress, investors should not underestimate how sustained margin pressure from currency swings and input costs could still affect earnings if recovery efforts...

Read the full narrative on Nestlé (it's free!)

Nestlé's outlook anticipates CHF96.0 billion in revenue and CHF12.0 billion in earnings by 2028. This is based on a projected 1.8% annual revenue growth rate and a CHF1.7 billion increase in earnings from the current CHF10.3 billion.

Uncover how Nestlé's forecasts yield a CHF86.23 fair value, a 4% upside to its current price.

Exploring Other PerspectivesSWX:NESN Community Fair Values as at Oct 2025

The Simply Wall St Community includes 19 unique fair value estimates for Nestlé, ranging from CHF65.45 to CHF144.10. While some see significant upside, ongoing margin concerns from elevated costs and currency headwinds remain front of mind for many, influencing expectations for earnings resilience and future returns.

Story Continues

Explore 19 other fair value estimates on Nestlé - why the stock might be worth 21% less than the current price!

Build Your Own Nestlé Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

A great starting point for your Nestlé research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Our free Nestlé research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Nestlé's overall financial health at a glance.

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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.swx.

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