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Investing.com - Kepler Cheuvreux initiated coverage on Fevertree Drinks Plc. (LON:FEVR) with a Hold rating and a price target of GBP8.25, citing balanced growth prospects and current valuation concerns.
The research firm highlighted Fevertree’s new US distribution partnership with Molson Coors as a significant growth driver for the premium mixer company in coming years, while noting this arrangement increases the company’s dependence on a single market and partner.
Kepler Cheuvreux expects US profitability to improve in the medium term, though it warned that near-term margins will remain under pressure due to high marketing investments planned over the next 2-3 years.
Outside the United States, the firm forecasts modest sales growth for Fevertree, with potential margin improvements supported by pricing discipline and favorable input cost trends.
At approximately 26 times expected 2026 earnings, Kepler Cheuvreux considers Fevertree shares to be fully valued at current levels, indicating it would adopt a more positive stance if the company demonstrated clearer acceleration in revenue growth.
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