Nichols PLC (AIM:NICL) shares bubbled up 3% to 1,000p after Deutsche Bank upgraded the stock, arguing the recent selling of the Vimto and Slush Puppie maker had gone too far.
The bank lifted its rating to 'buy' from 'hold' but kept its price target unchanged at 1,150p, implying upside of around 19% from the last close of 968p. The shares had fallen almost 40% from a peak of almost 1,500p last summer to below 900p last week.
Analyst Damian McNeela said an investor presentation revealed good revenue growth across Nichols' four main product categories.
In squash, Vimto holds around 13% value share of the UK market, second only to Robinsons, and grew revenues 4.6%, taking share from the category leader.
Ready-to-drink still drinks grew even faster, with revenues up 11.5%, nearly twice the rate of the broader category.
Flavoured carbonates remained more competitive, with Vimto revenues up 2.5% against category growth of 6.9%, though McNeela noted the company had deliberately prioritised value over volume.
The standout performer was energy drinks, where Vimto delivered revenue growth of 41%, albeit from a low base.
McNeela also highlighted the planned transition to in-market bottling in Africa as a potential driver of incremental international growth, and said the rollout of a new software used to manage procurement and inventory could support further gross profit margin improvements.