viewFevertree Drinks

Fevertree still has more room to fizz, says Investec

The premium drinks mixer brand enjoyed a sparkling end to 2016, boosting full-year numbers

Fevertree tonic water
Who ever thought there'd be so much money in tonic water?

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. 

Quick facts: Fevertree Drinks

Price: 2278 GBX

Market: AIM
Market Cap: £2.65 billion

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