Fevertree Drinks (AIM:FEVR) plc, the maker of the premium range of drinks mixers, has been given a lower share price target by Deutsche Bank after failing to make a splash in last-week’s first-half results.
Though sales were up 10% in the US (which became the largest geographic market last year), they were down 6% in the UK and 10% in Europe.
Chief executive Tim Warrilow said sales were hit by “unseasonable weather” at the start of summer, but there has been a “much more positive trading performance” in the second half of the year across all regions.
Deutsche Bank analysts were, however, wary of Fevertree’s guidance for the rest of the year, in which sales forecasts were revised lower.
“We remain cautious on near-term growth expectations given the challenging category backdrop but are encouraged that the brand continues to gain share across its product portfolio and regions,” said analysts.
They are optimistic of margin recovery thanks to hedged glass prices and lower freighting costs, but have nonetheless revised their share price target down to 1,325p from 1,450p.
Trading at 758.5p on Monday, the stock remains a buy in Deutsche Bank’s eyes.