Despite another year of record-breaking numbers, City broker Investec reckons there is still more room for the Fevertree Drinks PLC (LON:FEVR) share price to fizz higher.
In a trading update today, Fevertree said it expects to deliver sales in excess of £102mln for the 12 months to 31 December 2016, representing year-on-year growth of 72%.
Those revenues – in which Investec reckons there is a currency tailwind of between £5mln and £6mln – were almost 10% higher than Investec’s already-upgraded forecasts of £93.9mln.
As a result, the broker has upgraded its profit before tax forecasts for 2016 and 2017 by 12% to £34.8mln and £36.5mln respectively.
“This upgrade has been driven by a stronger fourth quarter performance in most regions and in both the on- [bars, restaurants etc] and off-trade [shops, retailers etc],” says Investec consumer analyst Nicola Mallard.
Mallard also says that the company has achieved a “higher share of the market [in the UK] and at a faster rate”, adding that there is still “plenty of global headroom” to continue to grow over the medium-term.
The analyst reiterates her ‘buy’ recommendation and upgrades her price target to £13 – more than 8% above the current price of £11.94.