Small-Cap FIZZ Likely Staying Flat
Management at National Beverage Corp. (FIZZ - Analyst Report) 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 [carbonated soft drink] 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 is rated a Hold.
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 stock's target price is $8.00, based on a 16 P/E on trailing 12-month earnings.