Fevertree has major US growth opportunity, says Jefferies

Analysts at Jefferies see the US as the largest growth opportunity for 'posh mixers' maker Fevertree.

Given premiumisation trends in spirits culture, Jefferies' proprietary US bartender survey found conditions were "in place" for Fevertree to push itself to the top of the premium mixers category.

"We would acknowledge that success in the UK is no guarantee of success in driving the premium mixers category in the US. Unlike the UK, where FEVR growth coincided with (or helped to stimulate?) the renaissance in high-end gin, drivers of the US will be both tonic and non-tonic led," Jefferies said.

While Jefferies noted that this won't happen overnight, success in the US could lead to a doubling of Fevertree's base, leading the broker to increase its price target on the AIM-listed firm from 3,000p to 4,000p.

Jefferies said there was scope for earnings per share momentum given the warmer than usual weather experienced throughout the second quarter, something the broker believes the market had partly priced in, but noted that if Fevertree was able to even partially emulate its UK success in the US, the firm would be well worth an incremental 3,000p a share.

In addition to the new price target, the broker reiterated its 'buy' rating on Fevertree shares.