BUZZ-Slump in wheat, soya spells fatter margins for Nestle

LONDON, June 23 Mon Jun 23, 2014 10:58am EDT

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LONDON, June 23 (Reuters) - ** Nestle could benefit from the steep drop in wheat prices as falling costs give margins a boost.

** Last week, western European wheat prices hit 4-month lows

** Wheat, corn and now soya - the major chunk of Nestle's cost base - all on the backfoot, points out Hobart Capital's Justin Haque.

** That means the company's costs have been cheaper than expected for over a month, says Haque.

** Company reports on July 8 & no major revision activity from analysts seen yet.

** Nestle's shares are up by around 7 percent since the start of 2014, roughly in line with a 6 percent rise on Zurich's benchmark SMI equity index and a similar gain of around 6 percent on the pan-European FTSEurofirst 300 index.

** In April, Nestle said it expected sales growth to pick up in the next few quarters.

** European food and beverage stock equity returns graphic:

link.reuters.com/bur54t (RM: sudip.kargupta.thomsonreuters.com@reuters.net)

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