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Investing.com - UBS raised its price target on National Beverage (NASDAQ:FIZZ) to $45.00 from $42.00 on Monday, while maintaining a Sell rating on the beverage maker’s stock. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.1, with two key strengths: holding more cash than debt and maintaining strong liquid assets.
National Beverage reported fourth-quarter fiscal 2025 earnings per share of $0.48, matching UBS’s forecast, as stronger top-line growth was offset by weaker gross margins. The company’s shares finished up 4.6% following the earnings announcement, compared to the Consumer Staples Select Sector SPDR Fund (XLP) which remained relatively flat. The company’s gross profit margin stands at 37%, with a return on equity of 37% for the last twelve months.
UBS analyst Peter Grom noted that the quarterly results were "likely better-than-feared" and that management indicated volume performance has remained solid in the current quarter to date.
The investment case for National Beverage will largely depend on top-line and market share trends going forward, with UBS suggesting investors may take a "wait and see approach" before concluding that a sustained inflection is taking shape.
National Beverage shares currently trade at a 23% premium to U.S. beverage peers compared to a five-year historical average of 11%, leading UBS to maintain its Sell rating despite the price target increase, citing limited visibility on revenue and profit trajectory over the next 12-18 months. InvestingPro analysis suggests the stock is currently fairly valued, with a P/E ratio of 22.5x and a PEG ratio of 4.4x, indicating relatively high valuation metrics. Subscribers can access 6 additional ProTips and comprehensive valuation metrics on the platform.
In other recent news, National Beverage Corp. reported impressive fourth-quarter earnings, surpassing analyst expectations. The company achieved earnings per share of $0.48, slightly above the anticipated $0.47, and recorded revenue of $314 million, exceeding the consensus estimate of $304.75 million. This marks a 5.5% increase in revenue compared to the same period last year, with net income rising to $44.8 million from $43.7 million year-over-year. Operating income also saw an 8.6% increase, reaching $57.5 million. For the full fiscal year ending May 3, 2025, National Beverage reported earnings per share of $2.00, up from $1.89 the previous year, with annual revenue slightly increasing to $1.2 billion. Gross margin improved to 37.0% of sales, while operating income grew by 7.8% to $235 million. The company attributed its strong performance to successful marketing campaigns and new product innovations, such as LaCroix’s Sunshine, Cherry Lime, and Blackberry (TSX:BB) Cucumber flavors. National Beverage expressed optimism about future growth, citing its innovative brands as well-positioned despite challenging market conditions.
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