Fevertree share price and full-year earnings results preview

When are Fevertree ’s results expected?

Fevertree Drinks PLC, the United Kingdom-based supplier of carbonated mixers for alcoholic spirits, is set to release its full-year (FY) 2022 results on 22 March 2023. The results are for the full-year ending December 2022.

What is ‘The Street’s’ expectation for the FY results?

‘The Street’ expectations for the upcoming results are as follows:

Revenue of £344,22 million : +10.65% year-on-year (YoY)
Earnings per Share (EPS) : 21.30 pence : -44.23% (YoY)

Fevertree, a producer of mixers for spirits, in a January trading update stated that it was aiming to increase its top-line growth, especially in the US, but as stubbornly high inflation lingers, might find it difficult to do so.

With the price gap between Fevertree’s premium products and its main competitor Schweppes’ shrinking last year, raising its prices further might damage the British company’s market share.

This is particularly bothersome since the cost of manufacturing glass bottles, which contain 80% of Fevertree’s products, has risen sharply as a result of significantly higher energy costs.

Even though according to Grand View Research the global cocktail mixers market size was valued at $8.6 billion in 2021 and projected to expand at a compound annual growth rate of 8.7% from 2022 to 2030, spirit sales may decline amid the cost-of-living crisis, impacting Fevertree’s earnings and share price.

How to trade Fevertree into the results

Refinitiv data shows a consensus analyst rating of ‘hold’ for Fevertree – 2 strong buy, 12 hold and 4 sell - with the median of estimates suggesting a long-term price target of 1000.00 pence for the share, roughly 5% lower than the current price (as of 20 March 2023).

IG sentiment data shows that 89% of clients with open positions on the share (as of 22 March 2023) expect the price to rise over the near term, while 11% of clients expect the price to fall whereas trading activity over this week showed 60% of sells and this month 69% of buys.

Fevertree Drinks – technical view

The Fevertree Drinks share price, down 1% year-to-date, and by around 63% from its January 2022 peak at 2,872 pence, remains in a sideways trading range below its 55-week simple moving average (SMA) at 1,207p whilst trading around 30% above its 804.5p July 2022 seven-year low.

Fevertree Weekly Chart

On the daily chart the Fevertree share price seems to be finding support slightly above its October-to-March uptrend line at 1,009p ahead of Wednesday’s 2022 full-year earnings which may well determine the stock’s future trend.

A rise above the 200- and 55-day simple moving averages (SMAs) at 1,071p and 1,080p respectively and daily chart close above these levels and also the 1,120p December-to-March resistance line would likely lead to the December peak at 1,210p being revisited.

Fevertree Daily Chart

Failure at the six-month uptrend line at 1,009p and the psychological 1,000p mark on a daily chart closing basis would push the early November and January lows at 944.5p to 926p to the fore, a fall through which could lead to the July and October 2022 lows at 805.5p to 804.5p being back in play.

Technically speaking the important levels to watch out for are the 1,210p November and December peaks and the 944.5p January low as a break through these could mark the beginning of a sustained up- or downtrend following the recent three-month sideways trading phase.

Summary

Fevertree Drinks is set to release FY 2022 results on 22 March 2023.

Full-year 2022 results are expected to show a 10.65% YOY rise in revenue to £344,22 million and EPS at 21.30 pence, down 44.23% YoY.

Revenue is expected to be negatively impacted by rising glass production costs due to stubbornly elevated energy costs with Fevertree using glass bottles for 80% of its mixers and not wanting to increase its prices too close to its competitors’ such as Schweppes for fear of losing market share.

Long-term broker consensus suggests the share is a ‘hold’, with a median price target of 1,000 pence for the share, roughly 5% lower than the current price.

89% of IG’s clients with open positions are long the share but trading activity this week shows 60% of sells but this month 69% of buys.

The Fevertree share price is expected to eventually break out of its October-to-March sideways trading range and might do so following its 2022 full-year earnings.

The technically significant levels to watch are the 1,210p November and December peaks and the 944.5p January low as a break through these could mark the beginning of a sustained up- or downtrend following the recent three-month sideways trading phase.