Nestlé Nigeria Plc, a subsidiary of the global Nestlé Group, is one of Nigeria’s largest and most profitable food and beverages companies. It has operated continuously in Nigeria for over 57 years, manufacturing some of the country’s most recognized consumer brands, including Maggi, Milo, Golden Morn, Nescafé, Cerelac and Nestlé Pure Life. The company operates from three manufacturing facilities (Agbara, Flowergate and Abaji), and eight branch offices, employing over 2,300 people directly.
Current price: N2750
Rating: Buy
Price projection: N3000, N4350, and N4800
Technical Analysis
In this report, we shall use the following tools and analysis methods:
Elliott’s wave theory to understand the overall market sentiment
Fibonacci tools to determine support and resistance levels
The Relative Strength Index and volume to evaluate the market’s strength
The Money Flow Index to determine the market liquidity
Moving average and MACD to understand the nature of the trend
Top-down analysis to know the best investment position
Elliott wave analysis
Weekly chart: Market overview
On the weekly chart, Nestle trades within Wave Y of the grand cycle in wave 4. This reading suggests that the stock is within its corrective phase with potential for another bullish momentum. Due to the deep correction, the stock’s volume, liquidity, and momentum remain low. Yet, given Nestle’s fundamental potential, investors should expect a bullish run in the long term.
Daily chart: Investment opportunity
On the daily chart, Nestle completed its first corrective phase within the 0.5 Fibonacci level. Thus, the index is expected to commence its recovery phase. Given this sentiment, the indicators on the daily chart depict market recovery.
The stock’s bullish volume, liquidity, and momentum regained their strength. Notably, MACD signaled bearish divergence, preparing investors for a bullish run. In line with this analysis, investors should watch N2600 and N2700 as potential support levels with price projections of N3000, N4350, and N4800
SWOT analysis
