Fevertree trading update: where next for the share price?

The premium producer of carbonated mixers will release a trading update later this week, with its share price tumbling more than 24% on Monday after slashing its sales outlook due to a slump in UK consumer spending.

Fevertree issued a profit warning on Monday, with its share price falling more than 24% after it was forced to cut its sales outlook once again due to a slowdown in UK consumer spending.

The premium producer of carbonated mixers said it expects 2019 revenues to hit £260.5 million, lower than its previous guidance of between £266 million to £268 million, and representing growth of just 10% - well below the 40% the company reported in 2018.

Analysts had been forecasting sales of between £272 million to £275 million in 2019.

Fevertree is trading at £15.07 a share as of 14:05 GMT on Monday.

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Fevertree sees sales slump over Christmas period

Slowing sales over the Christmas period has hit the UK retail sector, with consumers tightening their belts over the festive season.

Not only did Fevertree report a slump in sales over the period, but companies like the fashion brand Superdry have hinted that annual profits could be dented after weak-than-expected Christmas sales.

Meanwhile, retailers like Marks and Spencer and Morrisons have already reported a significant decline in sales over the holiday season.

HSBC and Liberum Capital reiterate ‘buy’ rating

Analysts from HSBC and Liberum Capital reiterated their ‘buy’ rating for the stock in January ahead of the company’s latest trading update.

Both left their previous price targets for the stock unchanged, with HSBC and Liberum Capital issuing targets of £33 and £28.25 respectively.

Based on the stock trading at £15.07 the pair believe it has a potential upside of 87% and 119%. However, it is worth noting that both price targets were issued prior to Fevertree issuing its profit warning.

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