Varun Beverages, one of the largest franchisees for PepsiCo, has garnered significant attention in the financial world following a 'buy' rating from Citi, with a projected 38% upside in the stock price. Citi's bullish outlook stems from the company's strong market position and promising growth potential in the soft drinks sector.
The brokerage firm has set a target price of ₹800, highlighting several factors that contribute to Varun Beverages' appeal to investors looking to buy shares online.
Citi's positive outlook for Varun Beverages
Citi has initiated a 'buy' call on Varun Beverages, citing its robust market presence and future growth prospects. The brokerage sees significant upside potential in the company's stock, which is currently valued lower than its estimated potential. For investors who frequently buy shares online, this marks an opportunity to invest in a stock that has shown a history of solid growth.
The company is particularly poised to benefit from its expanding presence in markets like Africa, which Citi sees as a medium-term catalyst for revenue growth. This expansion is especially attractive for those who are looking to buy shares online in companies with growing international footprints.
Financial performance and growth potential
Varun Beverages has demonstrated consistent growth over the past several years, with the company reporting impressive financial results in recent quarters. Citi estimates the company's revenue and earnings per share (EPS) to grow at compound annual growth rates (CAGR) of 23% and 29%, respectively, over the period from 2023 to 2026. This strong financial performance has made Varun Beverages a favourite among investors who prefer to buy shares online in high-growth companies.
Additionally, Varun Beverages' strategic expansion into new geographies, including Africa and Southeast Asia, has bolstered its overall revenue growth. Investors looking to buy shares online can benefit from the company's growing market share and expanding product portfolio.
Recent stock performance and trading trends
Despite the optimistic rating from Citi, Varun Beverages shares were trading in red today. At 9:29 am, the stock was down nearly 2%, priced at ₹577.70 on the National Stock Exchange (NSE). However, despite this near-term decline, the stock has shown consistent long-term growth. Varun Beverages shares have risen by 16% year-to-date, in line with the Nifty 50 index's performance. Over the past 12 months, the stock has surged by 56%, significantly outperforming Nifty's 30% returns during the same period.
This recent downturn, where the stock fell by around 5% over the last month, is largely attributed to profit-booking in the fast-moving consumer goods (FMCG) sector. However, for investors who frequently buy shares online, such temporary fluctuations may present a buying opportunity in a stock that has demonstrated resilience and long-term growth potential.
Key takeaways
Varun Beverages continues to attract attention from the investment community, with Citi's 'buy' call and the projected 38% upside adding to its appeal. Despite some recent short-term weakness in the stock price, the company's strong market position, expanding geographic reach, and solid financial performance make it a compelling option for investors looking to buy shares online. The recent share split announcement also provides an additional incentive for retail investors, making the stock more accessible to a broader audience.
As the company continues to grow and expand its operations, particularly in international markets, investors who buy shares online in Varun Beverages stand to benefit from its long-term growth potential. With a target price of ₹800 and a projected upside of 38%, the stock remains an attractive option for those seeking to invest in a high-growth, high-potential company.
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