Irn Bru owner AG Barr PLC (LSE:BAG) can expect double-digit profit growth every year from now until 2028, analysts at Deutsche Bank believe.
Adjusted operating profits at the drinks company are expected to rise at a compound annual growth rate of 11% between the current financial year and 2028.
Sales are expected to experience a CAGR of 4.4%, the German bank added.
Analysts say the “attractive medium-term growth profile” stems from the group’s strategy to expand into high-growth categories such as canned cocktails and functional beverages as well as implement “numerous self-help margin levers”.
In recent years, the Scottish drinks firm has expanded its reach through the acquisitions of cocktail brand Funkin, oat milk producer Moma and energy drink Boost.
Now, with easing inflation, the in-housing of Boost production and cost and efficiency gains from a business reorganisation, Deutsche Bank believes it can develop “healthy free cash generation, giving [it] balance sheet flexibility”.
Therefore, analysts at the lender rate Barr a “buy” and see its shares rising to 685p, more than a 20% premium to its current market value.