Berenberg lowers target price for Fevertree but anticipates 'massive' global expansion

Analysts at Berenberg lowered their target price on shares of soft drinks maker Fevertree on Tuesday, noting that UK growth had been "less smooth" than it had been in the US.

Berenberg said 2019 had always been billed as "a transition year" for Fevertree, the first part of which, accelerating US growth, had gone to plan.

In contrast, the German bank said the handover of growth from the UK had been "less smooth", with the slowdown having been much sharper than anticipated.

In its November trading update, Fevertree reduced 2019 UK growth guidance to 2%.

Nonetheless, while Berenberg said that this was "disappointing", its analysts noted there were "plenty of signs" to suggest that Fevertree remained in a strong position.

Looking out to 2020, Berenberd expected revenue growth to rebound to 6% and also anticipated some internal drivers of improvement - such as a better retail promotional strategy and new product development.

"In our view, the recent trading update provided reassurance that the UK business can bounce back next year and therefore we believe focus should return to the impressive progress being made on the massive international expansion opportunity ahead," said Berenberg, which reduced its price target for the firm' s shares to 2,900.0p from 3,250.0p but maintained its 'buy' recommendation.