Fevertree Drinks (LSE:FEVR) shares climbed 5.5% on Tuesday after Jefferies raised its rating on the stock to Buy from Hold, pointing to the recently announced partnership with Molson Coors Beverage Company (NYSE:TAP) as a key driver for growth acceleration in the U.S.
Jefferies also increased its price target to £11, emphasizing that the TAP collaboration is expected to boost Fever-Tree’s U.S. distribution capabilities and operational efficiency while mitigating supply chain risks. The partnership will allow the company to redirect resources toward innovation and brand development.
Analysts underscored that Fever-Tree’s investment story has evolved significantly since the bank began coverage in 2016. Today, the company has a stronger route-to-market in the U.S., plans to double its marketing spend, and benefits from domestic production, which helps smooth out supply chain disruptions.
Jefferies added that Molson Coors has strong incentives to make the alliance a success. With its core beer portfolio facing headwinds in the U.S., TAP aims to premiumize its offerings and diversify beyond beer, with Fever-Tree playing a central role in this strategy.
The bank estimated that a successful rollout of Fever-Tree could lift TAP’s U.S. growth by more than 200 basis points over the next three years. It likened the strategic fit between TAP and Fever-Tree to Heineken N.V.’s partnership with China Resources Beer in China, noting the potential for a similar growth trajectory.
Jefferies further pointed to Fever-Tree’s increasingly asset-light business model and strong cash generation, with £70 million already returned to shareholders through buybacks and another £60 million planned by 2026 — a sign of growing confidence in margin recovery and sustained cash flow.
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