Fevertree’s fizz falls flat with investors as shares dip again
Fevertree’s share price is down more than nine per cent today as the tonic maker continues to tumble from its mid-September peak.
The gin mixer brand saw its stock hit its highest level on 12 September, at 4,120p, but it has failed to climb further, instead seeing shares dip in the weeks before today’s losses.
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Trading at 2,752p this afternoon, one analyst attributed Fevertree’s market troubles to a wider market sell-off of stocks whose value outstrips the companies’ earnings.
“Asos and Boohoo are coming under pressure as well,” said Ned Hammond, an analyst at Berenberg who recommended investors snap up Fevertree stock while prices are low, saying investor appetite was also dampened by wider economic concerns.
Hammond added that its huge September valuation came during the summer heatwave, with more people cooling down with a gin and tonic, and pointed out that while its stock has seen declines since, soft drink producers have suffered worse since the weather turned.
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“In terms of fundamentals people should still be buying Fevertree,” he told City PM
“There’s plenty of headway for growth in the UK. It’s the leading mixer player now they have a much bigger market share and there’s still a lot of growth in that and in getting into restaurants and bars across the country.”
Hammond said Fevertree’s US prospects look healthy too, after it signed a deal with the country’s bigger distributor, Southern Glazer’s Wine & Spirits, to build up its profile in America.