Will Nestle (NSRGY) Stock Be Helped By A Bigger Is Better Approach?

NEW YORK (TheStreet) -- Nestle  (NSRGY) CEO Paul Bulcke defended the company's large structure, saying it allows Nestle to scale up functions such as R&D that aid the entire group. Size works well, he said, as long as the front end of the businesses can operate independently, he told Reuters.

While Nestle is reducing its huge range of businesses and moving deeper into niche medical products to improve returns, the food and beverage giant still likes its heft.

Last year Nestle missed its long-term forecast for sales growth of 5% to 6%, and many analysts think that even with investments in faster-growing areas like medical nutrition and dermatology, Nestle is just too big to move the needle, Reuters reports.

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Its market value of $248 billion is 15% larger than the number two consumer products firm, Procter & Gamble (PG), and compared with other food makers, Nestle is 86% bigger than its nearest rival Unilever  (UL), according to Thomson Reuters data.

Shares of Nestle are flat this afternoon at $77.72.

 
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