Fever-Tree Drinks (LSE:FEVR) shares rose on Tuesday after Kepler Cheuvreux upgraded the drinks company to “buy” from “hold” and increased its price target.
The shares gained 4.2% to 828 pence, while the FTSE 250 was down approximately 0.4%.
Kepler raised its price target for Fever-Tree to 910 pence from 900 pence, representing potential upside of about 14.5% from the broker’s reference price.
The broker cited accelerating growth in the US and increased earnings visibility among the reasons for its revised recommendation.
Kepler Points to Faster US Growth
Kepler said Fever-Tree’s US performance has improved as Molson Coors expands distribution, merchandising and marketing activities.
According to the broker, US off-trade growth accelerated to 16% in July and August from 6% in the first quarter of 2026.
Kepler also said conditions in the UK had stabilised, while products outside Fever-Tree’s core tonic-water range now account for 32% of sales.
The broker said the company’s input-cost hedging and profit guarantee with Molson Coors provide greater visibility over EBITDA. It also expects free cash flow to support potential dividends and share buybacks.
Earnings Estimates Raised
Kepler increased its adjusted EBITDA forecast for Fever-Tree by 5.8% for 2026 and 8.5% for 2027.
The broker also raised its adjusted earnings-per-share estimates by 2.2% for 2026 and 11% for 2027.
The revised forecasts accompanied Kepler’s decision to move its recommendation to “buy”.
Fever-Tree Reports Higher First-Half Revenue
The broker’s upgrade follows Fever-Tree’s first-half results, which showed revenue rising 14% to £165.1 million.
Pre-tax profit increased 30% to £14.6 million.
Fever-Tree’s chair also purchased approximately £348,000 of the company’s shares last week, according to a regulatory filing.
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