Nichols price target hiked to 1400p as Deutsche Bank flags value Proactive uses images sourced from Shutterstock
Nichols PLC (AIM:NICL) received an updated assessment from Deutsche Bank on Friday, as the broker stated that the beverage group’s growth was underappreciated and its valuation was undemanding.
The shares were trading at 1,149p in early Friday activity as the broker reiterated its ‘buy’ rating and raised its target from 1,150p to 1,400p.
In a note titled ‘A Refreshing Opportunity’, Deutsche Bank said the UK soft drinks market was worth approximately £20.9 billion in 2025 and had grown at an 8.7% compound annual growth rate over the past five years.
While the near-term backdrop remains mixed, the broker said the category had historically proved resilient.
It pointed out that soft drinks had maintained a broadly stable share of the UK food and non-alcohol grocery basket despite varying economic conditions.
Deutsche added that innovation, marketing and reformulation continued to support long-term growth.
Addressing regulatory risks, Deutsche Bank said the deposit return scheme (DRS) remained a key investor concern and was already reflected in its forecasts.
The broker stress-tested AG Barr using a severe downside scenario that assumed disruption was limited to a 12-week period and that there was no pricing recovery.
Deutsche said this scenario would imply a roughly 1% downgrade to its FY28 sales forecast for AG Barr, even without a pricing recovery.
In its assessment, the broker said Nichols was even less exposed than AG Barr, given its sizeable squash business and international operations.
The broker’s 1,400p price target reflects its view that Nichols’ growth prospects are underappreciated and its valuation remains undemanding.