Britvic shares fizzed lower on Monday after RBC Capital Markets downgraded the drinks maker to ‘sector perform’ from ‘outperform’ and slashed the price target to 870p from 1,060p, citing mounting headwinds.
RBC said Britvic’s operating environment has significantly deteriorated.
“It’s not alone in that fact but, unlike the rest of our coverage, we believe it’s in a category with limited brand power and its concentrated UK footprint makes supply-chain disruption more impactful,” it said.
The bank said it was reducing its FY22E margin forecasts and now lies 200 basis points below consensus.
“In addition, its valuation no longer looks attractive on an absolute or relative basis,” RBC said.
At 1010 BST, the shares were down 5% at 857.86p.
