As of December 15, 2025, Nestle SA's estimated intrinsic value ranges from $59.61 to $113.56 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $113.56 | +45.7% |
| Discounted Cash Flow (5Y) | $98.46 | +26.3% |
| Dividend Discount Model (Multi-Stage) | $87.87 | +12.7% |
| Dividend Discount Model (Stable) | $90.87 | +16.6% |
| Earnings Power Value | $59.61 | -23.5% |
Is Nestle SA (NESN.SW) undervalued or overvalued?
With the current market price at $77.95, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Nestle SA's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.54 | 0.61 |
| Cost of equity | 4.2% | 6.2% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 22.9% | 24.2% |
| Debt/Equity ratio | 0.32 | 0.32 |
| After-tax WACC | 3.9% | 5.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $98 | $314,634M | 84.6% |
| 10-Year Growth | $114 | $353,548M | 71.9% |
| 5-Year EBITDA | $69 | $239,704M | 79.8% |
| 10-Year EBITDA | $85 | $278,867M | 64.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $9,882M |
| Discount Rate (WACC) | 5.5% - 3.9% |
| Enterprise Value | $178,299M - $250,793M |
| Net Debt | $60,952M |
| Equity Value | $117,347M - $189,841M |
| Outstanding Shares | 2,577M |
| Fair Value | $46 - $74 |
| Selected Fair Value | $59.61 |
| Metric | Value |
|---|---|
| Market Capitalization | $200840M |
| Enterprise Value | $261792M |
| Trailing P/E | 19.49 |
| Forward P/E | 20.38 |
| Trailing EV/EBITDA | 10.60 |
| Current Dividend Yield | 390.81% |
| Dividend Growth Rate (5Y) | 0.37% |
| Debt-to-Equity Ratio | 0.32 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $34.07 |
| Discounted Cash Flow (5Y) | 25% | $24.61 |
| Dividend Discount Model (Multi-Stage) | 20% | $17.57 |
| Dividend Discount Model (Stable) | 15% | $13.63 |
| Earnings Power Value | 10% | $5.96 |
| Weighted Average | 100% | $95.85 |
Based on our comprehensive valuation analysis, Nestle SA's intrinsic value is $95.85, which is approximately 23.0% above the current market price of $77.95.
Key investment considerations:
Given these factors, we believe Nestle SA is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.