Fevertree slumps after RBC downgrade

Fevertree slumped on Tuesday after RBC Capital Markets downgraded its stance on shares of the posh tonics maker to ‘sector perform’ from ‘outperform’ and slashed the price target from 2,600p.

RBC said the US business is doing as well as it anticipated. However, the margin outlook has "significantly" deteriorated.

"Fevertree has already missed margin guidance five times in the last four years, and after exploring the moving parts, we are not sure FY21E margin guidance looks conservative," it said.

"Lower margin forecasts and a higher UK tax rate leave us with a 2,000 price target."

At 1400 BST, the shares were down 4.7% at 2,188p.