TLDR
- Nestlé stock fell over 6.5% after reporting a 31% drop in first-half net profit to 3.47 billion francs.
- The company blamed restructuring costs for the profit decline.
- Nestlé is selling a 50% stake in its water business — including Perrier and S.Pellegrino — to Platinum Equity for €3 billion, forming a joint venture called Peranel.
- Organic sales grew 3.6%, but nominal revenue fell 2.5% to CHF 43.1 billion due to currency headwinds.
- Morgan Stanley had a Sell rating on the stock heading into results day.
Nestlé (NESN) stock dropped more than 6.5% on Thursday, hitting an intraday low of CHF 79.87, after the company posted a sharp fall in first-half profits alongside a major restructuring move for its water business.
Net profit fell 31.4% in the six months through June 2026, landing at 3.47 billion Swiss francs. The company pointed to impairment charges and restructuring costs as the main drivers.
Nominal revenue came in at CHF 43.1 billion, down 2.5% year-on-year. Currency movements were the drag — organic sales actually grew 3.6%. Operating margin edged down to 16.4%.
🚨 $NESN (Nestlé) H1 2026 Results
Sales down on FX, but organic growth improving…
CEO highlights steady progress despite uncertain environment 👀________________________________________
📊 KEY METRICS (H1 2026)
🔹 Reported Sales: CHF 43.1B (-2.5% YoY) 🔴
🔹 Organic… pic.twitter.com/hMPBnYbMLW— Emmanuel – Big Tech & AI Investor (@EmmanuelInvest) July 23, 2026
Despite the profit hit, management raised its full-year sales growth outlook. Markets weren’t impressed.
The results came alongside a deal that had been a long time coming. Nestlé confirmed it is carving out its Waters & Premium Beverages unit — home to Perrier, S.Pellegrino, Acqua Panna, and Nestlé Pure Life — into a 50-50 joint venture with U.S. private equity firm Platinum Equity.
The new entity is called Peranel. It carries an enterprise value of €4.9 billion.
Nestlé expects to receive roughly CHF 2.8 billion in cash proceeds when the deal closes. That’s targeted for the first half of 2027, subject to regulatory approvals.
Water Business Sale Fails to Lift Sentiment
The water deal was supposed to be a positive signal — part of CEO Philipp Navratil’s plan to refocus the business on higher-growth categories like coffee and petcare. But the market reaction suggests investors weren’t buying it as a clean win.
The water brands had long been viewed as non-core. Some saw the deal as more of a concession than a value-creation event. Selling half rather than the whole unit added to the mixed read.
Nestlé also walked into results day with little institutional goodwill. Morgan Stanley had reaffirmed a Sell rating on the stock in early July, with a price target well below where the stock was trading. That signal set a cautious tone heading into earnings.
Turnaround Still in Early Stages
CEO Navratil and CFO Anna Manz have been working to overhaul the KitKat and Nespresso maker after years of underperformance. The focus is on growing sales volumes and cutting the portfolio down to size.
The stock is trading at 18 times forward earnings — a discount to its five-year average. That might look cheap on paper, but Thursday’s results are a reminder that the road back is not straight.
Nestlé’s 52-week range runs from CHF 69.90 to CHF 87.09. At Thursday’s lows, the stock sat roughly in the middle of that range.
The Stoxx 600 was also down 0.6% on the day, offering no broader cover for the selloff.
Nestlé’s intraday low of CHF 79.87 marked its steepest single-day drop in recent months, as investors reassessed how long a meaningful earnings recovery will take.
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