Will Brexit cause a further share price drop for AIM stock Fevertree (FEVR)?

first_imgWill Brexit cause a further share price drop for AIM stock Fevertree (FEVR)? Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Kirsteen Mackay | Friday, 24th January, 2020 | More on: FEVR I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. See all posts by Kirsteen Mackay Sparkling formulaFrom 2014 to 2018, Fevertree’s meteoric rise was exciting, impressive and glamorous. The attraction of a sparkling gin and tonic in deliciously tempting flavours had consumers tripping over themselves to taste its selection of unique and tantalising flavours.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Its big selling point in the early days was its ability to give an air of sophistication and glamour to gin, a formerly unfashionable drink. Making the clever argument that if three-quarters of your drink is the mixer, it suggested you’d want to choose wisely.Its spectacular rise to success came as Fevertree was new in town and offering something unique.Unfortunately, the unique edge wasn’t to last as competitors swiftly cottoned on. Pretty quickly, supermarkets and big brands such as Schweppes were offering their own alternatives to the Fevertree range.Now there are signs that demand for gin has peaked, but it’s not likely to fall out of favour completely with consumers, so I don’t think the demand for gin is actually dead.It’s all in the flavourBut a more worrying trend for Fevertree is that consumers are now turning to the influx of flavoured gins available. If the gin is already flavoured, then Fevertree’s offerings are no longer giving a unique twist to the drink.There are so many gins available nowadays, I don’t know where to begin choosing one. The bottles and labelling are as attractive as perfume bottles and the choice of flavours astounding.The recent trading update wasn’t all doom and gloom. Growth is still happening, particularly in Europe (up 16%) and the US, where sales rose by a strong 33%. Total 2019 revenue is expected to grow by 10% year-on-year, but this is a far cry from the 40% growth seen in 2018.I think the main reason for the Fevertree share price plunge was its poor UK results. UK sales fell by 1% and as they account for half of overall sales, that’s bad news.With Brexit still to unfold, there are some issues for the firm to face. For a start, the UK may be facing a period of further belt-tightening, which I think means consumers might be less inclined to purchase premium mixers for their drinks. While Fevertree has an edge in being the premium offering for drink mixers today, I’m not sure this is enough to keep it growing in this environment.And it manufactures and bottles in the UK, sourcing ingredients from abroad. It has previously indicated that Brexit may force it to move its manufacturing overseas.I think there are still enough positives in the trading update to keep hope alive.  As such, I’d continue to hold the shares if I was an owner.But it has a price-to-earnings ratio of 28 and a dividend yield close to 1%. These are not overly enticing metrics and until they iron Brexit out, I wouldn’t be rushing to buy. Premium drinks manufacturer Fevertree Drinks (LSE: FEVR) suffered an almighty share price crash this week after a disappointing trading update featuring multiple downgrades to its financial metrics. Enter Your Email Address Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. last_img

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