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On Friday, CFRA analyst Garrett Nelson reduced the price target for National Beverage (NASDAQ:FIZZ) shares to $42 from $50, while maintaining a Hold rating on the stock. Nelson cited a downward adjustment in earnings per share (EPS) estimates and recent performance metrics as the basis for the revised target. According to InvestingPro data, FIZZ currently trades at a P/E ratio of 20.7x, which appears high relative to its near-term earnings growth prospects. InvestingPro offers 8 additional key insights about FIZZ’s valuation and growth potential.
National Beverage reported flat earnings per share of $0.42 for the January quarter, missing consensus estimates by two cents. The shortfall was attributed to revenue that came in lower than expected, with net sales declining by 1.1% to $267.1 million, which was $11.1 million shy of consensus figures. Despite the revenue miss, the company’s gross margin improved by 120 basis points to 37.1%, surpassing consensus by 30 basis points. InvestingPro analysis shows the company maintains strong financial health with a profit score of 4.33 out of 5, and its current ratio of 2.54 indicates robust liquidity position.
The price target adjustment reflects a forward price-to-earnings (P/E) ratio of 20.5x for the fiscal year ending in April 2026, representing a discount to the company’s five-year average forward P/E of 26.2x. Nelson has also revised the EPS forecast, lowering it by $0.02 to $1.98 for FY 2025 and by $0.05 to $2.05 for FY 2026. The company maintains impressive profitability metrics, with a return on equity of 44% over the last twelve months. Get comprehensive valuation insights and Fair Value estimates with InvestingPro.
The analyst pointed to a 3.4% decrease in sales volume as a key factor in the company’s top-line decline, which was slightly mitigated by a 2.2% increase in the average sales price. National Beverage attributed the disappointing sales figures to challenging weather conditions and natural disasters in key markets.
This quarter’s results continue a trend for National Beverage, marking the seventh time in the past eight quarters that net sales have not met consensus expectations. Nelson noted that while profitability metrics have shown improvement, the company’s lackluster top-line growth is concerning in the highly competitive beverage industry.
In other recent news, National Beverage Corp. reported third-quarter earnings that fell short of analyst expectations. The company posted earnings per share of $0.42, missing the analyst estimate of $0.43. Revenue for the quarter came in at $267 million, which was below the consensus forecast of $276.82 million and represented a 1.1% decline from the previous year’s $270.07 million. National Beverage attributed the revenue shortfall to challenging winter weather in the Midwest and Northeast, as well as wildfires in Southern California, which negatively impacted sales volumes in key markets. Despite these quarterly challenges, the company reported positive results for the trailing twelve months, with net sales rising to $1.2 billion and net income increasing by 10% to $186 million. Operating profit for the same period grew by 8% to $231 million. The company emphasized its ongoing marketing efforts, including in-store displays and sports sponsorships, to boost brand awareness. National Beverage also hinted at a potential innovation in the sparkling water category, which is currently being tested at a trade show.
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