Key Highlights
- Kepler Cheuvreux raised Fever-Tree rating from “Hold” to “Buy” with a price target increased to 910 pence from 900 pence
- Shares surged 4.2% to reach 828 pence on Tuesday, while the FTSE Mid-Cap 250 declined 0.4%
- U.S. off-trade sales growth accelerated to 16% during July-August period, compared to 6% recorded in Q1 2026
- Analyst firm increased EBITDA projections by 5.8% for 2026 and 8.5% for 2027
- Director purchased shares worth Ā£348,457 on September 11
Shares of Fever-Tree (LON: FEVR) advanced 4.2% to 828 pence during Tuesday’s trading session following an analyst upgrade from Kepler Cheuvreux. The brokerage elevated its rating to “Buy” from “Hold” while raising the price objective to 910 pence from 900 pence, suggesting potential upside of approximately 14.5% from the firm’s reference price.
According to Kepler, the stock’s recent pullback presents a compelling buying opportunity, supported by strengthening U.S. performance and enhanced earnings clarity.
The company’s U.S. operations have demonstrated significant improvement. Off-trade channel growth in the United States reached 16% during July and August, a sharp increase from the 6% expansion recorded in the opening quarter of 2026. Kepler attributes this acceleration to enhanced distribution networks, improved merchandising strategies, and stronger marketing initiatives executed through the Molson Coors partnership.
Performance in the United Kingdom has also stabilized. Previously a headwind for overall results, the UK market is no longer weighing on the company’s growth trajectory.
Fever-Tree’s product diversification strategy is gaining traction. Non-tonic beverages now represent 32% of total revenue, providing an additional growth avenue beyond the company’s traditional tonic water offerings.
Kepler highlighted several protective factors for profitability, including input-cost hedging strategies and a profit guarantee arrangement with Molson Coors that provide EBITDA cushioning. The firm also expects robust free cash flow generation to enable continued dividend payments and share repurchase programs.
Analyst Increases Profit Forecasts
The brokerage elevated its adjusted EBITDA projections by 5.8% for 2026 and 8.5% for 2027. Adjusted earnings per share estimates were increased by 2.2% for 2026 and 11% for 2027.
The rating change comes after a strong first-half performance. Fever-Tree delivered revenue expansion of 14% to Ā£165.1 million alongside a 30% jump in pretax profit to Ā£14.6 million.
Director Purchase Signals Conviction
Domenico De Lorenzo, a company director, acquired 44,674 shares at GBX 780 per share on September 11, representing a total investment of approximately Ā£348,457. Such insider transactions at current valuation levels typically attract market interest.
FEVR’s 52-week trading range spans from GBX 711 to GBX 973. The stock currently trades below its annual peak, with a market capitalization of approximately Ā£896 million and a price-to-earnings ratio of 43.15.
The broader Street consensus remains mixed. Among analysts covering the stock, one maintains a Buy rating while three hold neutral positions, with an average target price of GBX 920. Berenberg Bank maintained its Hold stance with a GBX 780 target. Jefferies carries a Buy rating with a GBX 1,100 target, increased from GBX 1,080 in July.
The latest quarterly results, published September 10, revealed earnings per share of GBX 9.50. Wall Street consensus projects full-year EPS of around GBX 38.32 for the ongoing fiscal period.
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