Jefferies analyst Ed Mundy upgraded the rating on Fevertree Drinks to a Buy today, setting a price target of p1,100.00.
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Ed Mundy has given his Buy rating due to a combination of factors that position Fevertree Drinks for significant growth. The recent partnership with TAP is expected to enhance the company’s scale and execution capabilities in the US, while also mitigating supply chain risks. This collaboration is set to double marketing expenditure, thereby increasing brand awareness and positioning Fevertree for accelerated growth and margin recovery.
Moreover, the alignment with TAP’s strategy to premiumize and expand beyond beer offers a strong incentive for both TAP and its distributors to promote Fevertree’s portfolio. The potential for higher margins and cash returns further strengthens the investment case. Additionally, the shift towards a more asset-light model and the planned share buybacks indicate confidence in sustained cash flow and margin improvement, making Fevertree an attractive investment opportunity.
Mundy covers the Consumer Defensive sector, focusing on stocks such as Diageo, Pernod Ricard, and Fevertree Drinks. According to TipRanks, Mundy has an average return of -0.2% and a 43.10% success rate on recommended stocks.