Mature Market for FIZZ

An update has just come out today on National Beverage Corporation (FIZZ - Analyst Report), in which senior consumer products analyst Steven Ralston, CFA is restating his Hold rating on the company. We excerpted the following details:

"Management is implementing a ‘fantasy of flavors’ strategy that emphasizes the expansion of a branded beverage portfolio of proprietary distinctive-flavored soft drinks, energy drinks, juices, and other specialty beverages. The strategy makes the company less dependent on the negative CSD trend in the U.S.

"However, in the near term, input costs are expected to continue rising due to double-digit increases in the prices of aluminum cans and high-fructose corn syrup. The stock of National Beverage has traded in a P/E multiple range of 12.6 to 34.3 over the last five years. At the current P/E of 14.9, we find the stock to be attractive, but not compelling since CSD volumes continue to decline at almost a double-digit pace and no earnings progress is expected over the next 12 months.

"The North American market for carbonated soft drinks (CSDs) is maturing. As consumers increasingly focus on health and wellness, the consumption of caloric carbonated soft drinks has declined in the U.S. In reaction, management is concentrating on exploiting the rising consumption of products perceived to deliver health, wellness, and/or functionality. The stock is rated a Hold and the stock’s target price is $8, based on a 16 P/E on trailing 12-month earnings."

Read the full analyst report on FIZZ.