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Berenberg hikes target price on Fevertree
(Sharecast News) - Analysts at Berenberg hiked their target price on drinks maker Fevertree from 790p to 920p on Monday as it put the spotlight on its US partnership with Molson Coors. Berenberg stated that as Fevertree transitions from being a tonic producer to a non-alcoholic mixer business, it believes that the top-line pressure experienced over the last few years will eventually reverse.
The German bank said key to the story, in the medium term, remains the success of the US Molson Coors distribution deal, which it noted provides a minimum profit backstop, which should help underpin its forecasts. However, Berenberg notoed that upside visibility was low until the distribution deal ramps into 2027.
Therefore, Berenberg said Fevertree, on which it has a 'hold' rating, remains a "show-me" story until at least 12 months' time.
"Fevertree trades on a FY26E P/E of 34x and EV/EBITDA of 19x, with an FCF yield of just under 3%. We believe the investment case hinges on a successful execution of the Molson Coors distribution deal, yet visibility around it remains low at this point. We increase our price target to 920p (from 790p), rolling the DCF forward one year," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com
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