Nestlé shares sink near 8-year low after baby formula recall crisis

Company shares of Nestlé have plummeted close to their lowest level in eight years as the Swiss conglomerate has trouble getting back on its feet following the largest product recall in its history due to contaminated baby formula.

The infant-milk scandal that affected sold products worldwide came as the world’s biggest food company was already struggling to revive its shares from their multi-year lows, Caliber.Az reports citing an analysis by Bloomberg. 

According to the outlet, investors are expected to demand a clear plan of action on how the company expects to restore sales on February 19, when the Swiss firm presents its annual report. 

Compared with December 2021, when Nestlé’s shares reached their peak level, the stock is now down 38%. Over the same period, shares of its main competitors — Danone and Unilever — have risen by 32% and 28%, respectively. The decline in Nestlé’s share price has been attributed to falling sales, rising costs, weak consumer demand, and the infant formula scandal that erupted in January 2026. 

However, several experts told Bloomberg that Nestlé’s problems may run deeper. Thomas Kühne of LLB Asset Management, which holds a stake in Nestlé, believes that the poor performance could be indicative of the company's overly large focus on cost-cutting and achieving short-term quarterly targets rather than on making long-term decisions.

Kai Lehmann, a senior analyst at Flossbach von Storch, which also holds shares in the Swiss firm, noted that recent growth has been driven only by higher product prices, whereas he believes the goal should be to increase real sales.

According to Vontobel analyst Jean-Philippe Bertschy, Nestlé's annual results have "almost anecdotal" as investors are now closely monitoring quality control standards in the infant formula business while awaiting a new strategic plan from management.

“It will be crucial that we receive an update on some of the under-performing units, how they want to reduce the net debt level and how they plan to accelerate the free cash flow,” said Bertschy. “The market will look for a precise road map rather than another broad reassurance – a plan that is clearly underpinned by concrete actions, milestones and measurable commitments.”

Due to possible contamination with the bacterial toxin cereulide, which can cause vomiting and diarrhoea in infants. Nestlé launched a global recall of over 800 baby food products in January 2026. Brands affected included Beba, Guigoz, Lactogen Harmony and Alfamino.

By Nazrin Sadigova