UPDATE: UBS Downgrades National Beverage (FIZZ) to Sell

February 3, 2021 4:34 AM EST
Get Alerts FIZZ Hot Sheet
Price: $49.37 --0%

Rating Summary:
    2 Buy, 3 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 4 | New: 18
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(Updated - February 3, 2021 5:49 AM EST)

UBS analyst Sean King downgraded National Beverage (NASDAQ: FIZZ) from Neutral to Sell with a price target of $92.00 (from $88.00).

The analyst comments "We downgrade to Sell ahead of difficult compares, mounting competition, and rising input & logistics costs at stretched valuation. We upgraded FIZZ in Jun'19: Always Darkest Before the Comps ahead of easier comps, stabilizing share & velocity trends, and a relative valuation of -1 std dev below its avg. discount. We currently see the opposite setup ahead (+1800 bps Feb-20 to Mar-20 per Nielsen). We acknowledge that FIZZ emerged as a beneficiary of the demand shift to at-home consumption in 2020, but we expect the company to face growing challenges in 2021 on both the topline and margins. On the topline, we expect a gradual improvement in mobility following the vaccine roll-out to result in reduced at-home demand against difficult pantry-loading compares. We expect margins to be pressured from packaging inflation, elevated freight costs, and normalizing category promotions & marketing spend and expect -65 bps decline in FY22E op margins. We expect FIZZ to grow +MSD rate in the years ahead, comparable to peers KO/PEP, which we think justifies a comparable fwd multiple of 23x. At 33x NTM P/E, we see the risk-reward skewed to the downside."

For an analyst ratings summary and ratings history on National Beverage click here. For more ratings news on National Beverage click here.

Shares of National Beverage closed at $121.61 yesterday.


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