0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
Fevertree Drinks PLC (LON: FEVR)
Fevertree Drinks Plc is an FTSE AIM All-Share listed beverages company founded in 2013 and headquartered in London, United Kingdom. Its geographical areas of operations were divided into segments like the United Kingdom, Europe, the US and the Rest of the World. Fevertree is one of the major carbonated mixers for alcoholic spirits. The Company has a distribution network in around 75 countries globally. FEVR has various products ranges catered to hotels, restaurants, bars and cafes. The Company's mixers are generally used as the accompaniments for alcoholic spirits. They are also used in cocktails. Its products range comprises different variants of tonic water, lemonade, ginger ale, soda water and cola. The Company uses Fever-Tree brand to sell its offerings to restaurants and bars.
On 15 September 2021, FEVR would announce its H1 FY2021 results.
In FY2020, FEVR paid a total dividend of GBX 15.68 per share, up ~4.% YoY. The last dividend of FY2020, GBX 10.27 per share was paid on 28 May 2021 (final dividend). It had an ex-dividend date of 8 April 2021.
Growth Prospects
Key Risks
Now we will analyse some key fundamental and shareholders statistics of Fevertree Drinks PLC.
AGM Trading Update (released on 20 May 2021)
Financial and Operational Highlights (for the year ended 31 December 2020 as of 18 March 2021)
(Source: LSE Website)
Share Price Performance Analysis
(Source: Refinitiv, Research done by Kalkine Group)
On 13 July 2021, at 9:35 AM GMT, FEVR’s shares were trading at GBX 2,530.00, down by 0.12% against the previous day closing price. Stock 52-week High and Low were GBX 2,786.54 and GBX 1,919.00, respectively.
On a daily chart, FEVR's price is sustaining above 200-day EMA of about GBX 2,379.48, indicating the possibility of an upward movement. The 200-day SMA of about GBX 2,390.93 is also sustaining below the stock price. Hence, there could be an uptick in the stock price in the near term. The MACD line is trading above the centreline and forming a positive crossover with the signal line.
In the last three months, FEVR’s stock has delivered a decent positive return of ~11.05%. Also, it has outperformed the FTSE AIM All-Share Food, Beverage and Tobacco index with a return of around 8.17% and the FTSE AIM All-Share index with a return of about 1.11%.
Valuation Methodology: EV/Sales Approach (NTM) (Illustrative)
Business Outlook Scenario
FEVR delivered a resilient performance in FY2021, with Off-Trade performance in the UK exceeding the total mixer category. In the US also, Off-Trade sales surged 38.2% YoY in the 12 weeks to 27th March. Furthermore, the Company has a strong business model characterised by a diversified channel mix, ability to cater to evolving consumer demands, strong financial position, continuous investments and innovation, which provides further confidence for FY2021. The Company could benefit from its strong relationship with on-trade customers, new marketing opportunities, the launch of new products, expansion of its team and demand growth for premium spirits going into FY2021. The management anticipates further productivity benefits as the pandemic situation improves.
The Board is confident that its continued investment in the future opportunity for the brand would drive long-term sustainable growth. On the technical chart, the next important support level is at GBX 2,119.00.
Considering the Company’s strong business model, its resilient performance in FY2021, its focus on new opportunities, its strong relationship with customers, the decent profitability, liquidity and leverage position of the business, and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation on Fevertree Drinks Plc at the current price of GBX 2,530.00 (as on 13 July 2021 at 9:35 AM GMT), with lower-double digit upside potential based on 11.37x EV/NTM Sales (approx.) on FY21E sales (approx.).
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached or if the price closes below the support level (indicative stop-loss price).
*All forecasted figures and Peer information have been taken from Refinitiv, Thomson Reuters.
*The dividend yield is subject to change as per the stock price movement.
*The reference data in this report has been partly sourced from REFINITIV
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