Key Highlights
- Kepler Cheuvreux raised Fever-Tree’s rating from “Hold” to “Buy,” increasing the price target to 910 pence from 900 pence
- Shares jumped 4.2% to 828 pence on Tuesday, while the FTSE Mid-Cap 250 declined 0.4%
- US off-trade sales accelerated to 16% growth in July-August versus 6% recorded in Q1 2026
- The broker increased EBITDA projections by 5.8% for 2026 and 8.5% for 2027
- Director Domenico De Lorenzo purchased £348,457 in shares on September 11
Fever-Tree (LON: FEVR) shares surged 4.2% to 828 pence on Tuesday following a rating upgrade from Kepler Cheuvreux, which elevated the stock to “Buy” from “Hold.” The investment firm established a fresh price target of 910 pence, representing potential upside of roughly 14.5% from its reference level, raised from the previous 900 pence target.
According to Kepler, the stock’s recent pullback presents an appealing buying opportunity, driven by strengthening growth in the United States and enhanced earnings predictability.
The American market is showing substantial momentum. Off-trade channel growth in the US reached 16% during July and August, a dramatic improvement from the 6% recorded in the opening quarter of 2026. Kepler attributes this acceleration to enhanced distribution networks, improved merchandising strategies, and stronger marketing execution through the partnership with Molson Coors.
Meanwhile, the UK business has stabilized. Previously a headwind to overall performance, the domestic market is no longer weighing on consolidated results.
The company’s product diversification strategy is gaining traction. Non-tonic beverages now represent 32% of total revenue, providing Fever-Tree with an additional growth engine beyond its flagship tonic water portfolio.
Regarding downside protection, Kepler highlighted input cost hedging strategies and a profit guarantee arrangement with Molson Coors as safeguards for EBITDA margins. Robust free cash flow generation is also anticipated to underpin both dividend payments and share repurchase programs.
Broker Increases Profit Forecasts
Kepler elevated its adjusted EBITDA projections by 5.8% for 2026 and 8.5% for 2027. The firm also increased adjusted EPS estimates by 2.2% for 2026 and by 11% for 2027.
The rating enhancement comes on the heels of a robust first-half performance. Fever-Tree delivered revenue expansion of 14% to £165.1 million and saw pretax profit climb 30% to £14.6 million.
Director Share Purchase Signals Conviction
Director Domenico De Lorenzo acquired 44,674 shares at GBX 780 per share on September 11, representing a total investment of approximately £348,457. Such insider buying activity at current price levels typically attracts market attention and signals management confidence.
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 £896 million and a price-to-earnings ratio of 43.15.
The broader analyst community maintains a mixed stance. Coverage includes one Buy recommendation, three Hold ratings, with the consensus price target at GBX 920. Berenberg Bank maintained a Hold rating with a GBX 780 target. Jefferies holds a Buy rating with a GBX 1,100 target, upgraded from GBX 1,080 in July.
The company’s latest earnings release on September 10 reported quarterly EPS of GBX 9.50. Analyst consensus forecasts full-year EPS of approximately GBX 38.32 for the current fiscal period.
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