No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Analysts at Berenberg hiked their target price on drinks maker Fevertree from 790p to 920p on Monday as it put the spotlight on its US partnership with Molson Coors.
Berenberg stated that as Fevertree transitions from being a tonic producer to a non-alcoholic mixer business, it believes that the top-line pressure experienced over the last few years will eventually reverse.
The German bank said key to the story, in the medium term, remains the success of the US Molson Coors distribution deal, which it noted provides a minimum profit backstop, which should help underpin its forecasts. However, Berenberg notoed that upside visibility was low until the distribution deal ramps into 2027.
Therefore, Berenberg said Fevertree, on which it has a 'hold' rating, remains a "show-me" story until at least 12 months' time.
"Fevertree trades on a FY26E P/E of 34x and EV/EBITDA of 19x, with an FCF yield of just under 3%. We believe the investment case hinges on a successful execution of the Molson Coors distribution deal, yet visibility around it remains low at this point. We increase our price target to 920p (from 790p), rolling the DCF forward one year," said Berenberg.
RBC Capital Markets downgraded Schroders on Monday to 'sector perform' from 'outperform' but lifted its price target on the stock to 610p from 440p to reflect the total consideration of its takeover bid from Nuveen.
Schroders announced last week that it had agreed to be taken over by US investment manager Nuveen in a 9.9bn deal. Nuveen, part of the Teachers Insurance and Annuity Association of America, will pay 612p per share.
RBC said in a research note on Monday that Nuveen's bid was likely to succeed, and with shares trading close to the implied offer value, it sees limited remaining upside, hence the rating downgrade.
The price offered by Nuveen comprises a cash consideration of 590p a share and permitted dividends of up to 22p per share. The cash consideration was a 29% premium to the closing share price on Wednesday, a day before the offer was announced.
Citi has kept a 'neutral' stance on Centrica ahead of the energy group's annual results this week, raising questions about the company's potential long-term targets.
The bank said that investors will be waiting to see whether Centrica announces another share buyback alongside its full-year figures on 19 February. It also noted there were hopes that the company will provide EBITDA guidance for 2030 that will be "sufficiently attractive and credible".
"Our view is that Centrica will prioritise growth over further share buyback, having bought back c.25% of shares and returned c.2bn over the last three years," said the analysts. "We also believe SBB at these levels are less preferable to delivering value creative investments, that will drive long term earnings growth. The key unknown is what could they buy and for what price?"
In the absence of further M&A, Citi has pencilled in a FY28 EBITDA target towards the bottom end of the 1.6bn-1.9bn guidance range.
"A FY30 EBITDA target can only impress if coupled with a credible path to delivery," Citi added.