Craft brewing the key?

Extract from article in today's Fin Review

"Macquarie is tipping the shift to premium and craft products to continue. This is good news for United Malt, because craft beer requires up to three times more malt than some mainstream beers.

The analysts there initiated coverage last week with a $5.33 target price and outperform rating. Bell Potter initiated coverage with a buy call and $5 a share price target.

United stock closed last week at $4.68.

The Bell Potter analysts weren’t put off by United Malt starting life with $433 million net debt on a pro forma 2019 financial year basis, which was 2.7 times expected 2020 earnings before interest, tax, depreciation and amortisation.

Bell Potter likes United's favourable exposure to a weaker Australian dollar, with about 90 per cent of revenue offshore. Its analysts also noted contracted revenue made up about 90 per cent of forecast 2020 financial year sales and 75 per cent of 2021 forecasts."