The company's stock gained RM3.52, or 3.8 per cent, to RM97.18, lifting its market capitalisation to about RM22.8 billion, although trading activity remained relatively subdued.
The positive market reaction followed the release of the group's financial results, which showed improved revenue and profitability during the second quarter of the financial year.
Research firm CIMB Securities said it expects Nestlé Malaysia to deliver even stronger earnings in the second half of 2026, supported by easing boycott pressures, resilient export demand and sustained operational improvements.
According to the brokerage, the company's profit margins are likely to remain resilient, driven by selling price adjustments introduced during the first half of 2025, a better product mix and improved operating leverage as sales volumes continue to recover.
The research house also pointed to ongoing operational efficiency and cost optimisation measures as factors expected to support profitability.
However, it noted that earnings could soften sequentially during the second half of the year because the first half has historically been the company's stronger period.
"Sequentially, however, we expect earnings to moderate half-on-half, as 1H is typically the stronger half of the year seasonally," CIMB Securities said in its research note.
The brokerage highlighted that Nestlé Malaysia recorded an 8.7 per cent year-on-year increase in revenue during the second quarter ended June 30, 2026, while core net profit rose 38.3 per cent to RM168.3 million over the same period.
For the first six months of the financial year, revenue increased 7.5 per cent from a year earlier, while core net profit climbed 18.6 per cent to RM348.6 million.
According to CIMB Securities, the first-half performance represents 56.6 per cent of its full-year earnings forecast and 58.1 per cent of Bloomberg consensus estimates, indicating that the company is on track to meet or exceed market expectations.
The research house also said that although geopolitical tensions in the Middle East have contributed to higher prices for some commodities, the outlook for Nestlé's key raw materials remains favourable and should help cushion broader input cost pressures.
Coffee prices have declined 9.6 per cent since the beginning of the year, while cocoa prices have fallen 14.8 per cent, remaining well below the elevated levels recorded last year.
Commenting on the company's strategy, CIMB Securities said, "The group also reiterated its commitment to operational efficiency and cost discipline to mitigate cost hikes while continuing to invest in brand-building activities and product innovation to drive sales."
Despite its positive outlook, the brokerage identified several risks that could affect future performance, including escalating geopolitical tensions, depreciation of the Malaysian ringgit and earlier-than-expected price increases that could encourage consumers to switch to lower-priced alternatives.
Reflecting its confidence in the company's prospects, CIMB Securities maintained its "buy" recommendation on Nestlé Malaysia and retained its target price of RM115 per share.