UBS Downgrades National Beverage to Sell, PT Lowered to $40

UBS Downgrades National Beverage to Sell, PT Lowered to $40

UBS Group has downgraded National Beverage Corp. (FIZZ) to a "sell" rating and reduced its price target from $45 to $40, according to a report released on September 2, 2025 [1]. The downgrade comes amidst growing competition in the sparkling water market and increasing pressure on the company's margins.

National Beverage, best known for its LaCroix sparkling water brands, has been a leader in the fast-growing sparkling water segment. However, the company has faced increasing competition from major beverage giants such as Coca-Cola, PepsiCo, and Nestlé, who are investing heavily in this category [2].

The analysts at UBS cited concerns over rising competition and potential margin compression as reasons for the downgrade. They noted that while National Beverage has a strong brand portfolio, the intense competition could erode its market share and profitability.

The company's latest financial results showed a 15.1% year-over-year growth in revenue, driven primarily by the strong performance of its LaCroix brand. However, the analysts at UBS expressed caution about the sustainability of this growth in the face of increasing competition.

National Beverage has a market capitalization of around $3.8 billion and holds over $300 million in cash. The company has minimal debt and maintains some of the best margins in the soft drink space. Despite these strengths, the analysts at UBS believe that the company's growth prospects are overestimated and that the stock is now overvalued.

The downgrade by UBS follows a series of similar moves by other analysts. Jefferies Financial Group has a "hold" rating on the stock, while Citigroup has a "buy" rating and a price target of $120. Stephens has an "equal weight" rating, and Wells Fargo & Company also has an "equal weight" rating [1].

The stock price of National Beverage has been volatile in recent months, with a one-year high of $131.91 and a one-year low of $81.57. The current price of the stock is $96.59, which is down from its peak in the past year [1].

References:
[1] https://www.marketbeat.com/instant-alerts/pinnacle-financial-partners-nasdaqpnfp-given-new-10800-price-target-at-ubs-group-2025-09-02/
[2] https://seekingalpha.com/article/4819932-national-beverage-hold-for-steady-returns-amid-sparkling-water-growth