Why is Nestle stock falling despite good results and bullish rating from brokerages? Know important triggers

Despite good results and bullish rating of brokerage, the stock is the top loser in the index. At present, the stock is trading with a decline of about 3%.

Vigorous action is being seen in the stock market on the last trading day of the week. In such a market, stock action is being seen on the basis of news. One such stock is Nestle of the FMCG sector, which is in focus today. Despite good results and bullish rating of brokerage, the stock is the top loser in the index. At present, the stock is trading with a decline of about 3%. If you have Nestle’s stock in your portfolio, then know the reasons for which the stock is falling.

The reason for the decline in Nestle’s stock?

• Big issue of royalty payment in MNC companies
• Nestle’s royalty payment to be renewed in 2024
• Nestle India pays 4.5% royalty to the parent company
• Fear of royalty increase in the market as HUL recently increased royalty payment

What did the management of Nestle India say?

• Company provides royalty payments to parent for operation and manufacturing support
• Parent has about 2000 products, which benefits Nestle India
• The company has signed MoU with Nestle R&D Center for the Millet project.
• The parent company also indicated further increase in prices.

Brokerage Opinion on Nestle India

• Rating – overweight
• Target – Rs 21200

Morgan Stanley on Nestle India

• Rating – Underweight
• Target – Rs 15315

Goldman Sachs on Nestle India

• Rating – Neutral
• Target – Rs 19900

Jefferies on Nestle India

• Rating – Hold
• Target – Rs 18100

HSBC on Nestle India

• Rating – Buy
• Target – Rs 22000

Nomura on Nestle India

• Rating – Buy
• Target – Rs 22900