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Key Highlights
- Kepler Cheuvreux raised Fever-Tree’s rating to “Buy” from “Hold,” increasing the price target to 910 pence from 900 pence
- Shares climbed 4.2% to reach 828 pence on Tuesday, while the FTSE Mid-Cap 250 dropped 0.4%
- Off-trade sales in the U.S. accelerated to 16% growth during July-August, a sharp increase from the 6% recorded in Q1 2026
- The broker increased its EBITDA projections by 5.8% for 2026 and 8.5% for 2027
- An insider purchase worth £348,457 was completed by a company director on September 11
Fever-Tree (LON: FEVR) shares advanced 4.2% to 828 pence during Tuesday’s trading session following an upgrade from Kepler Cheuvreux. The brokerage elevated its rating to “Buy” from “Hold” and increased its price target to 910 pence from 900 pence, suggesting potential upside of approximately 14.5% from the reference level.
According to Kepler, the recent pullback in share price presents a compelling buying opportunity, particularly given the strengthening U.S. performance and enhanced earnings clarity going forward.
Growth in the United States has gained significant traction. The company’s U.S. off-trade segment expanded by 16% during July and August, representing a substantial improvement from the 6% growth rate recorded in the opening quarter of 2026. Kepler attributes this acceleration to enhanced distribution networks, improved merchandising strategies, and more effective marketing efforts executed through the Molson Coors partnership.
Meanwhile, the UK business has shown signs of stabilization. Previously a headwind for overall group performance, the domestic market is no longer weighing on consolidated results.
Product diversification is gaining momentum as well. Non-tonic offerings now represent 32% of total revenues, providing an additional growth engine beyond the company’s traditional tonic-water portfolio.
Regarding downside protection, Kepler highlighted several mitigating factors including input-cost hedging strategies and a profit guarantee arrangement with Molson Coors that should provide EBITDA support. Robust free cash flow generation is also anticipated to underpin both dividend payments and share repurchase programs.
Analyst Lifts Profit Forecasts
The brokerage increased its adjusted EBITDA projections by 5.8% for 2026 and 8.5% for 2027. Meanwhile, adjusted earnings per share estimates were raised 2.2% for 2026 and 11% for 2027.
This rating change comes on the heels of encouraging first-half results. The premium mixer company reported revenue expansion of 14% reaching £165.1 million, while pretax profit surged 30% to £14.6 million.
Director Purchase Signals Conviction
On September 11, company director Domenico De Lorenzo acquired 44,674 shares at GBX 780 per share, representing a total investment of approximately £348,457. Such substantial insider purchases at current valuation levels typically attract market attention and signal confidence from company leadership.
FEVR’s shares have traded in a 52-week range between GBX 711 and GBX 973. At present levels, the stock remains below its annual high, with the company commanding a market capitalization of approximately £896 million and trading at a P/E multiple of 43.15.
The broader Street sentiment remains mixed. Among analysts covering the stock, one maintains a Buy recommendation, three have Hold ratings, and the consensus price target stands at GBX 920. Berenberg Bank has reaffirmed its Hold rating with a GBX 780 target. Jefferies maintains a Buy stance with a GBX 1,100 target, which was raised from GBX 1,080 in July.
The company’s most recent earnings release, published September 10, revealed quarterly earnings per share of GBX 9.50. The Street is currently projecting full-year EPS of around GBX 38.32 for the ongoing fiscal period.
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