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Investing.com - Morgan Stanley initiated coverage on Royal Unibrew (CSE:RBREW) (OTC:ROYUF) with an Overweight rating and a price target of DKK570.00 on Thursday.
The investment bank views Royal Unibrew as well-positioned in the beverage market with a balanced portfolio of non-alcoholic beverages (54% of revenue) and alcoholic products (46%).
Morgan Stanley notes that while soft drinks face challenges such as sugar taxes and healthier eating trends, these secular pressures appear less acute than those facing alcohol, where moderation trends are more impactful.
The firm highlights Royal Unibrew’s strategic portfolio pivot to address demographic changes, increasing its exposure to low/no sugar products by 8 percentage points since 2019, which now represent 24% of revenue and have grown twice as fast as regular carbonated soft drinks.
Within its alcohol segment, Royal Unibrew has reduced its beer exposure by 8 percentage points since 2019, further diversifying its product mix as part of its ongoing portfolio transformation.
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