Nestle’s shares rose today (17 February) after the Swiss food group said it had “outperformed” the market in 2010 and had started this year with “continued momentum”. Here is what leading analysts said about the results from the world’s largest food maker – and the outlook for the business in 2011.

Andrew Wood, senior research analyst, European food and HPC, Sanford Bernstein

“The FY 2010 results highlight yet another strong year for Nestle as, once again, it has proved its ability to withstand commodity inflation and other pressures and still deliver good results. Not surprisingly, guidance is for more of the same in 2011, with expectations of achieving the Nestle model of 5-6% top-line growth and constant-currency margin growth, despite the “volatile raw material prices”. We expect investors to be pleased with the strength and stability of Nestle and, given its weak start to the year, we expect a somewhat positive stock reaction.”

Jon Cox, head of European food and beverage research, Kepler Capital Markets

“We view the stock as the safest in the consumer space given its geographical and portfolio diversification and the change in treatment of trade spend will lead to best in class operating margin.”

Andreas von Arx, Helvea

“A convincing set of results, especially with very strong top-line growth. Nestle reported organic growth signficantly ahead of expectations. The underlying margin of the continued business was 10 basis points below expectations – for H2 2010 vs H2 2009, the EBIT margin remained at 13.7% for the food and beverage business, a result of the commodity price pressure in the sector. These are patterns we also saw at the other European food producers. The full reiteration of the Nestle model for 2011 should be a positive.”

Philip Gorham, Morningstar

“Nestle’s full-year results were very close to our forecasts and slightly better than most of its consumer product rivals’, thanks to strong growth in its nutrition business. We think the firm’s momentum is already reflected in the stock, which is up slightly in early trading in Europe. We are maintaining our fair value estimate. We continue to believe, however, that Nestle is an appropriate holding for investors wishing to own broad exposure to the consumer staples industry.”

Jean-Philippe Bertschy, food and beverage analyst Bank Vontobel

“Robust results across the board, as Nestle is benefiting from past investments in attractive product categories and restructuring. The significant input cost inflation and currency impact will weight on 2011 results, however management remains very confident in growing the business by 5-6% organically and in improving the operating profit margin in constant currencies. An additional buyback is now only a question of time in our view.”