Fever-Tree: ~20% Rebound on EBITDA Expectations … and Margot Robbie?
Company Update (FEVR LN) (Buy): After 2024 results last week, shares have surpassed the high after the Molson Coors deal.
Highlights
Shares rose 20.5% in 2 weeks, but still 28% lower than a year ago.
Multiple datapoints show Fever-Tree is winning in the U.S. market
More headline terms on U.S. partnership profits were disclosed.
~37x 2025 consensus EPS, after impact from U.S. model transition.
At 840.0p, we see 69% total return (15.5% IRR) by 2028 end. Buy.
Introduction
We review our Buy rating on Fever-Tree after the release of full FY24 results last Tuesday (March 25).
Fever-Tree shares rose 14.3% last week and, as of Friday close, were up 20.5% since a recent trough on March 17, surpassing the 800p closing price on January 30, when the new U.S. partnership with Molson Coors was announced:
Fever-Tree Share Price (Last 1 Year)
Source: Google Finance (31-Mar-25).
We initiated our Buy rating on Fever-Tree in June 2024, and added it to our “Select 15” model portfolio as a small position in mid-July. As of Friday close, shares have lost 20.9% since our initiation (after dividends). We also hold Fever-Tree in real life and more than doubled our position on February 5 (at ~730p), after shares have fallen back ~10% from their post-news high. We sold most of this incremental purchase at a profit this morning (at ~830p).
Full 2024 results included slightly faster sales growth and roughly in-line EBITDA but, more importantly, key headline terms for the Molson Coors partnership. 2025 sales have been relatively unaffected by deteriorating U.S. consumer sentiment. We continue to see Fever-Tree as a unique asset that will be acquired by a strategic buyer eventually, though the nascent nature of its international business means the stock looks expensive on current financials.
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