Food Nestlé shares under pressure after sudden management change
The change of CEO at Nestlé, which was unexpectedly announced (yesterday) Thursday evening, has not been well received by the markets in the initial reaction. Analysts are divided as to whether the new management can restore confidence in the markets.
23.08.2024, 10:26
SDA
At least Laurent Freixe is no stranger. By 9.35 a.m., Nestlé shares had lost 2.4 percent to 87.36 francs. Shortly after the opening, they had even fallen by around 4 percent, but were then able to stem the losses somewhat. As a result, the index heavyweight also dragged down the overall SMI market, which dipped by 0.3 percent.
Overall, the election of Laurent Freixe as the new CEO was viewed positively by the majority of analysts. Thanks to his almost four decades of service in the Group, he brings with him a deep understanding of Nestlé's various divisions and businesses, wrote JPMorgen in a commentary.
However, the sudden change at the top also raises questions about the future course of business. Recently, the company's operating results have been rather disappointing and the share price has fallen significantly since the beginning of the year.
Failed to calm the markets
According to the Baader analyst, the quick choice of an internal candidate instead of an external new CEO could be perceived negatively by the markets. "For us, this could be seen as a message aimed at stabilizing the company in the short term and not changing it with new ideas in the long term."
Overall, the challenges for the new CEO are extensive, wrote Bank Vontobel in a commentary. However, radical changes are not to be expected from the new boss. Freixe stands more for continuity. This is also important, as Nestlé now needs stability above all in order to regain the trust of investors.
According to ZKB, the task for Freixe is not easy. However, with the new leadership, there is now an opportunity to restore confidence in the markets. Freixe's strong internal support and industry expertise should help him in this.
However, the markets have not yet fully digested the news, so the tide could well turn in the course of the day.
The analysts' conference shortly before the stock market opened was also unable to calm the markets in the long term. Freixe's main aim was to improve performance again and gain market share. However, he did not want to comment on the annual forecast.
