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Zacks Investment Research upgraded SodaStream International Ltd. (SODA - Snapshot Report) to a Zacks Rank #1 (Strong Buy) on Jan 26. An impressive outlook, solid fundamentals and innovative products are the rank drivers for this stock.

Why the Upgrade?

SodaStream has topped earnings estimates for 8 straight quarters and is expected to report another solid performance late next month, owing to strong third quarter results. The potential long-term earnings growth rate for the stock is 30.4%.

SodaStream’s third quarter earnings of 80 cents per share beat the Zacks Consensus Estimate by 17.7% and last year’s result by 66.7%. Revenue of $112.5 million also increased 48.7% year over year on the back of strong performances in both of the product categories (soda makers and consumables) and in all four geographic regions.

SodaStream raised its expectation for the fourth quarter and full year 2012 results after reporting robust third quarter results. The company projects revenue growth of 46% for 2012, up from the prior expectation for an increase of 40%. Net income is expected to increase 59% year over year, compared to the earlier guidance for growth of 55%.

Estimates have mostly increased after the strong fiscal third quarter results and bright outlook for the upcoming quarter. The Zacks Consensus Estimate increased 0.5% to $2.11 per share for fiscal 2012, while it grew 0.4% to $2.67 per share for fiscal 2013.

We believe the stock has bright prospect ahead due to solid demand for its products, strategic partnerships like that with Kraft Foods Group, Inc. (KRFT - Analyst Report), enhanced marketing techniques, product innovations, accretive acquisitions and successful strategic investments.

Other Stocks to Consider

Other stocks in the diversified consumer products sector worth considering are Jarden Corp (JAH - Snapshot Report) and Nutri/system (NTRI - Snapshot Report), both of which hold a Zacks Rank #2 (Buy).

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