* Nestle chairman to think about long-term stake development

* Says L'Oreal holding good for shareholders of both groups

ZURICH, Aug 25 (Reuters) - Nestle the world's biggest food group, has not yet decided what it will do with its stake in L'Oreal , Nestle Chairman Peter Brabeck was quoted as saying on Wednesday.

The Vevey-based maker of Nescafe coffee and KitKat chocolate bars, holds a 30 percent stake in the French cosmetics group and some analysts believe Nestle is undervalued due to uncertainty over whether it will opt to sell or raise its L'Oreal holding.

"We have not yet decided what we want," Brabeck was quoted as saying in Switzerland's HandelsZeitung.

"The board has asked me to think about what the longer-term development could look like," Brabeck said, adding the holding was very positive for shareholders in both groups.

Nestle CEO Paul Bulcke said in June there were no plans to change the "status quo" over the stake, which Nestle has held for over 30 years.[ID:nLDE65L21B] (Editing by Jon Loades-Carter)