In a report published Tuesday, analysts at Susquehanna Financial Group initiated coverage of SodaStream International Ltd SODA with a Positive rating and a price target of $24. The analysts believe that there could be upside potential to the price target if there is acceleration in sales and M&A activities overseas.
The analysts believe that Keurig Green Mountain, Inc GMCR and The Coca-Cola Company KO are likely to dominate the US markets, "with Keurig Kold becoming the de facto market technology." However SodaStream;s overseas market is both profitable and growing, which is not reflected in the stock price yet.
"Also, if indeed SODA is ahead of the industry in developing a combined hot/cold system, SODA could become an M&A target," the analysts added.
According to Susquehanna, "Putting a conservative 9x 1yF EV/EBITDA on SODA's non-US business (fully-costed – i.e. including corporate expenses on a proportionate basis) would value the stock at $24 by April 2016."
The analysts believe that exiting the US market could be beneficial for the company's stock.
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