On Wednesday, CFRA raised the price target for National Beverage Corp (NASDAQ:FIZZ) to $50 from $45, while keeping a hold rating on the stock. The adjustment reflects a valuation based on a forward P/E of 24.4x for the fiscal year ending April 2026, which is slightly below the company's five-year average forward P/E of 25.7x. The firm's analysts have kept their earnings per share (EPS) estimates steady at $1.95 for FY 2025 and $2.05 for FY 2026.
The stock's recent performance is believed to be driven by investors purchasing shares ahead of the cutoff date for the company's special dividend of $3.25 per share, set to be distributed on July 24. National Beverage reported earnings per share of $0.47 for the April quarter, aligning with consensus and marking a 20% increase from $0.39 in the same quarter of the previous year. The company's net sales climbed 3.7% to $297.3 million, surpassing consensus by $6.3 million.
In addition to the sales increase, National Beverage saw its gross margin expand by 100 basis points to 36.7%, despite being slightly below the consensus by 10 basis points. A year-over-year rise of 5% in case volume was also highlighted as a positive sign, especially considering the recent challenges faced by the industry regarding volume pressures.
Management credited innovative flavors and packaging, including the introduction of the new LaCroix Mojito flavor, as key factors in the brand's growth. While the CFRA maintains a cautious stance, suggesting there may be more attractive investment opportunities within the soft drinks sector, the analyst acknowledged the encouraging volume improvement and the easing of margin pressures for National Beverage.
In other recent news, National Beverage Corp., the maker of LaCroix sparkling water, has made significant strides in its business operations. The company has announced a special cash dividend of $3.25 per share, marking its twelfth payout in two decades. This follows eleven consecutive quarters of record sales, increased gross profits, and operating income, reflecting robust market performance.
National Beverage Corp. has also formed a partnership with Major League Soccer team Inter Miami CF, becoming the official sparkling water of the club. The partnership, which aims to deepen community ties and promote health and wellness in South Florida, will feature LaCroix during Inter Miami CF’s matches and events. The collaboration also extends to the team’s youth soccer initiatives, supporting young athletes and encouraging active participation in sports.
In addition, National Beverage Corp. has shown its dedication to innovation in the beverage industry with the introduction of a new LaCroix flavor, Mojito, thereby expanding its diverse product range. The company is set to release its fiscal year results soon, which are anticipated to reflect continued momentum in sales and profitability. These recent developments highlight National Beverage Corp.'s commitment to both financial growth and community engagement.
InvestingPro Insights
According to InvestingPro data, National Beverage Corp (NASDAQ:FIZZ) holds a market capitalization of $4.82 billion, with a P/E ratio of 27.39, reflecting investor confidence in the company's earnings potential. The company's price to book ratio stands at 8.57 as of the last twelve months ending Q4 2024, indicating a premium valuation compared to its book value. In terms of performance, FIZZ has experienced a strong return over the last three months, with a 23.57% price total return, showcasing robust investor sentiment.
Two key InvestingPro Tips highlight the financial health and potential concerns for investors. Firstly, National Beverage's balance sheet is robust, holding more cash than debt, which may provide a cushion against market fluctuations and enable strategic investments. Secondly, while the company is trading at a high P/E ratio relative to near-term earnings growth, which could suggest the stock is overvalued, analysts predict the company will be profitable this year, which may justify the high valuation to some investors.
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