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Investing.com - Jefferies upgraded Fevertree Drinks Plc. (LON:FEVR) (OTC:FQVTF) from Hold to Buy on Tuesday, while raising its price target to GBP11.00 from GBP9.00.
The upgrade follows Fevertree’s partnership with Molson Coors (TAP), which Jefferies believes will significantly enhance the premium mixer company’s scale and execution capabilities in the U.S. market.
The deal also de-risks Fevertree’s supply chain, according to Jefferies, positioning the company for accelerated growth and margin recovery.
Jefferies notes that marketing spend is set to double, which should boost brand awareness for Fevertree in the American market.
The firm highlighted that Fevertree’s superior growth and margin profile compared to mainstream beer provides strong incentives for Molson Coors and its distributors to push the brand, potentially leading to higher cash returns for shareholders.
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