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JPMorgan Cazenove adds small fizz to Britvic shares with upgrade to ‘overweight’ from ‘neutral’

“With the uncertainty around the UK market and Christmas trading behind us following a good Q1, we believe the market can focus on the increasing quality of the growth and cash flows”

Britvic PLC -
JPMorgan retained a 1,065p price target on the stock, which was changing hands at 927p each

JPMorgan Cazenove added a little fizz to Britvic PLC (LON:BVIC) shares on Monday, upgrading its rating for the soft drinks firm to ‘overweight’ from ‘neutral’.

In a note to clients, JPMorgan’s analysts said: “In an increasingly uncertain 2020 Beverages earnings growth environment (e.g. China, India), we believe Britvic offers the attraction of good visibility on mid-single-digit EPS growth (FY20E: +3%, 5% MT CAGR) and improving cash generation (with increasing balance sheet optionality).”

READ: Britvic cheery after “robust” start of the year

The analysts noted that the FTSE 250-listed stock trades at a relatively attractive valuation, with a 14.8 times calendar 2020 price/earnings and around a 25% sector discount, supported by a 3.5% dividend yield.

They concluded: “With the uncertainty around the UK market and Christmas trading behind us following a good Q1, we believe the market can focus on the increasing quality of the growth and cash flows.”

JPMorgan retained a 1,065p price target on the stock, which was changing hands at 927p each, up 0.2% on Friday’s close.

Quick facts: Britvic PLC

Price: 785.5 GBX

LSE:BVIC
Market: LSE
Market Cap: £2.1 billion
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