SodaStream (SODA) Remains Hold-rated at Deutsche Bank

Deutsche Bank maintained a Hold rating on SodaStream International (NASDAQ: SODA). Comments follow its Q3 results.

Analyst Bill Schmitz Jr said, "While there is decent opportunity to shift mix to consumables amongst loyal users, management has been focused on driving trial and increasing household penetration, which has proved to be considerably difficult on a same door basis now that distribution build out is complete. We note significant margin potential if the company turns off the spending spigot and instead focuses on selling higher-margin refill canisters and syrups, with the biggest risk distribution losses as the home carbonation category slows and competition enters with deeper pockets. Maintain Hold rating as fundamental trends likely to remain challenging in the near-term," he said.

"Revenue is now expected to decline 9% (5% previously) with EBITDA decline of 26% (+5% previously). Net income is now expected to decrease 42% (-5% previously). Implied Q4 revenues of $127m represent a 24% decline YoY with implied EBITDA of $46m for the year and $11.5m for 4Q14. As previously stated by the company, it is struggling to drive demand in the US, and is now “introducing a comprehensive growth plan that will serve as blueprint for returning SodaStream to profitable growth” which will likely be discussed on the call. PepsiCo test is interesting but confined to a few retailers in one geography," he added.

For an analyst ratings summary and ratings history on SodaStream International click here. For more ratings news on SodaStream International click here.

Shares of SodaStream International closed at $21.92 yesterday.

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