After its warning over rising logistics costs earlier this summer, is it time to revisit Fevertree Drinks (AIM:FEVR) PLC (LON:FEVR), the mixer maker, whose shares are down 16.5% from their 2021 peak?
Well, according to one Wall Street bank, the jury is out. Citi, in a note to clients reviewing the latest non-alcoholic beverages data, restated its neutral call on the stock.
It said while US sales advanced an encouraging 19.5% in the last four weeks, but also noted Fevertree’s fairly punchy valuation (over 50-times forecast earnings).
“We think further share price outperformance continues to rely on Fevertree delivering ahead of the sales guidance,” Citi said in a brief summary of research on the group.
“Against this backdrop, evidence of good Nielsen trends and an ongoing strong reopening of the on-trade remains crucial.”
In July the group Fevertree said its financial performance in the first half had been mixed, with strong sales growth but narrowing margins.
Global revenue in the first half of 2021 was up 39% to £141.8mln on a constant currency (CC) basis from £104.2mln in the same period of 2020.
Growth in the home market – the UK – looks like it might be losing some fizz, with half-year revenues just 4% higher at £50.3mln but the US, Europe and the rest of the world (RoW) more than picked up the slack.
US revenues on a CC basis were up 42%; Europe’s revenues rose 104% and the RoW saw 71% growth.
As a result of the strong revenue performance, the group has increased its full-year revenue guidance range to £295mln to £304mln.