Fevertree Drinks Share Discussion Threads

[christh] 12/12/2018 22:14

Devalpha
apologies,
Tried to reply quick and missed it.
It is Patron, you are right.

thanks for reading my post.

[sogoesit] 12/12/2018 21:33

I’m not sure FEVR’s perception in consumers’ eyes is to do with “quality”;.
I think it’s to do with “taste”. However, taste can have a psychological element to it too.
The perception FEVR itself wants to project is “premium”; not quality and that rests on perception. Some perceptions can last a long time once they’re entrenched; others can change quickly, as with Superdry.

[yf23_1] 12/12/2018 21:24

My Tesco store now has backstock in Fevertree with all shelf positions full.
End date on stock comig in is Sep 19.
They have also got a promo on the 8 pack cans at 50p off.
However Schweppes 1783 has 75p off.
I don't get this quality thing with Fevertree, I bought the ord tonic and its not that great a taste.
Its got no artificial sweetners so it has that going for it but I see it as a bit overhyped.
Look at Superdry,once the marketing gloss/fad wears off and competition takes off that high P/E is going to look rather silly.

[sogoesit] 12/12/2018 21:22

Problem is, at £24, using consensus forecasting the nearest upcoming full year of 49p makes the valuation excessive (EPS growth from 39 to 49 is about 25% and revenue growth from last year (£170m) to this year’s forecast of £226m comes in at 33%).
Average historical revenue growth rate has been in the high 60%s. So a revenue growth forecast of 33% would be a dramatic decline!!
Paying 33x for 49p gives share price of 1617 for a PEG=1.
So, are investors expecting growth to accelerate in FY2019 and beyond, after a lull this year, with the P/E getting back into “alignmentR21; or is there some discrepancy in these forecast EPS values? I suspect the latter.
If the forecasts are right the share price is currently mismatched (to the upside).

[devalpha] 12/12/2018 20:30

Christh... the Tequila partnership is with Patron which is owned by Bacardi not Pernod.

[sogoesit] 12/12/2018 18:57

I think the market is turning, if not turned.
FEVR lagged on the way down so it will probably lag on any upside.
Probable fair value, in my book, of £24 til we get news on US market progress.
It’s notable, previously, when they thought they had “above expectation” news they made announcements. That has not been the case so far this year.
So they must be happy with the expectations currently.

From the IC, consensus for FY2018 as Villa says, is 49p (high:51.6; low:41.8).
Consensus for FY2019 is 57.44p (high:64.5; low:51.9).
From 8 analysts.

[villarich] 12/12/2018 18:20

Hang on I've just re read your post. So you think EPS could be 70p just from the U.K. alone? Given the U.K. is only 50% of earnings, that implies you think EPS for the entire company could be £1.40. Is that what you're saying?

[villarich] 12/12/2018 17:41

So if you think my estimates of EPS are very low then give your mates at the Brokers a ring and take it up with them.

[villarich] 12/12/2018 17:39

The EPS figures you're using make absolutely no sense I'm afraid. Maybe by 2022 but certainly not for FY2018. They are completely detached from what the brokers are saying so I think you're going to be very disappointed.I suspect you've just made them up.

[villarich] 12/12/2018 17:37

If EPS comes in at 60 or 70 pence it will be a Christmas miracle. To hit even 60p they would have to beat the revised 'ahead' expectations by another 20%. If that were the case we would have definitely had an update in November saying they were ahead of July.The 49.2p is the consensus from the BROKERS! You know the brokers who you think are never wrong?! So if you're disputing the consensus estimate I used then you're going against everything you've said previously about the brokers.

[christh] 12/12/2018 17:18

I do dispute that big time.

your estimates are very low.

what if the EPS comes at 60p or 70p just in the UK alone?
The figure is your assumed figure that you expect not what the ceo has said"the results will be comfortably ahead of expectations" hence a higher EPS than yours.

Should the US (likely) grow more than the 15% which contributed last year and say
to 25%-30% then an EPS of 65p will be fair.
And taking into account a further success in the US with projected sales to 40% for 2019 will move the EPS to 75p

Also we have not had an update on the China/India campaign and also our Europe growth.

Besides Fevertree has always create new products and has gone into partnerships like Pernord for Tequila.

What you must accept is that fevertree like its name is a very efficient,progressive,healthy,robust, and well run focussed business.

It will never run out of ideas to generate cash!...and it has proven that year upon year.

That is why I trumpet the brokers' target price of £42.50
Because the brokers have seen the strategies the company is using and also the target figures the company is aiming to achieve.

And then again Unilever or Pepsico or Pernord or Diageo will move for a takeover and become an asset for them.
It will increase their revenues substantially but who knows!
Anything is possible, nothing is unthinkable.

This my way of thinking for this gem.
No swearing, no foul language in your comments, hopefully!

[villarich] 12/12/2018 16:23

Typo - I'm erring on the side of caution...

[villarich] 12/12/2018 16:21

Yes I have I think we're looking at slightly more than the predicted 49.2p EPS. But I don't think it will be much more because of a margin squeeze following the move into the US.So to make it easy I'm going for an EPS of 50p. I don't think the market will want to pay much more than 50x earnings following results because I believe the volatility we've seen since September isn't going to go away overnight. It also depends on how much US growth nets off the slowdown in U.K. growth. If US doesn't pick up the slack then the market may not want to pay that high a multiple.So I have three scenarios.1. US growth / update isn't what the market expects and multiple drops to 45x. That gives us a price of £22.50.2. US growth is OK. Market willing to pay 50x. That gives us an share price of £25.3. US growth good and above expectations. Market willing to pay 55x. That gives us an share price of £27.50.Given there was no update in November building on the summer update then I am wrong on the side of caution so think options 1 or 2 are most likely. We know what's happening with U.K. growth and the fact it's slowing. The unknown is the US and until we get our first meaningful update, I can't say what I think the price and multiple will be beyond this year's financials. Is that enough thought for you? Feel free to share your figures...

[christh] 12/12/2018 15:45

have you got any figures your self?

have you done your own research?

According to my own research I have given you what the market should move the prices to.

if you have a different opinion, well done to you, that's your prerogative.

[villarich] 12/12/2018 14:47

Given the research you've done, what do you expect the figures to be?

[christh] 12/12/2018 14:45

This is heading to £25 and beginning of January will get to £28-£30

As I posted before the festive season is the strongest period for retailers,Beverage and textile manufacturers.

I expect the figures will be very strong as the company has fully use the opportunity
to sell nationwide all its products including seasonal stuff e.g. christmas crackers,
Advent calendar and other things.

This is off course my own opinion based on my own research

So you make your mind by doing your own research.

[villarich] 12/12/2018 14:30

Yes I stated a fact that the last time it broke £24 it fell to £22. What's your point? You're guessing that if it breaks £23 it will go to £25 but that is a guess and not based on any actual analysis. Like most of your guesses you're wrong 90% of the time. Not something to brag about. You lord about on here like you're the one who knows everything about the business when actually you know very little.

[christh] 12/12/2018 14:01

Villarich 11 Dec '18 - 15:38 - 4596 of 4613
“if it breaks through £23 then we are on the way to £25”

Based on what??? It broke £24 then it dropped to £22.

did you say something?

[villarich] 12/12/2018 11:25

I think the 49.2p for this year takes into account the fact they're already trading ahead. But yeah broadly agree with your calcs.

[5chipper] 12/12/2018 11:12

So, if ahead for this year then they trade on a p/e of 40ish

If this year comes in at 55p and they can grow the figure by 35% over next two years then p/e for fy20 will drop to 23

[villarich] 12/12/2018 11:02

Consensus is 49.2p for FY18 and 58.2 for FY19 and 68.5p for FY20

[5chipper] 12/12/2018 10:40

What are the eps broker forecasts for fy 18?

[traderglt] 12/12/2018 10:21

Excellent post Dev

[christh] 12/12/2018 07:55

And someone bought 142,327 shares at £22.69 at 6.31am this morning

So looks aiming higher today.

[wetdream] 11/12/2018 22:40

Someone apparently sells £7.3m and it doesn't get a mention here.
Amazing!