Vita Coco tariff-fueled sell-off overdone given mitigation levers - Piper Sandler

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Shares of The Vita Coco Company (NASDAQ:COCO [https://seekingalpha.com/symbol/COCO]) perked up after the close on Tuesday after Piper Sandler said the recent pullback in the stock -- likely due to revised tariffs -- was overdone as the company has “sourcing flexibility” to mitigate any negative impacts.

“We believe COCO can offset some incremental tariffs by shifting its sourcing away from higher tariff countries, and can take more pricing action if needed,” Piper Sandler analysts Michael Lavery and Luke Maloney said in their research note to clients.

With coconuts sourced primarily from Southeast Asian, Central and South American countries, Vita Coca can shift its highest tariff product from Brazil (50% tariff) to non-U.S. markets which are ~17% of COCO’s total volume. Lavery and Maloney believe the Philippines – with a 19% tariff – could fill the gap within 4-6 months.

“With sourcing shifts, we calculate COCO’s potential weighted average tariff to be ~21%, which likely adds ~6% of incremental costs in 2026 versus its already including ~6% of baseline tariff costs,” Piper’s analysts said.

Since COCO has already taken pricing action for this baseline tariff cost, and elasticities for Q2 pricing look manageable, Lavery and Maloney think COCO can take commensurate pricing, likely at the beginning of 2026, to help offset its 6% incremental tariff cost.

Given COCO’s tariff mitigation options and “overdone” reaction in the stock price since the August 1 tariff deadline date, Lavery and Maloney upgraded Vita Coco (NASDAQ:COCO [https://seekingalpha.com/symbol/COCO]) to Overweight from Neutral with a $39 price target, representing 15% upside from Tuesday’s closing price.

Vita Coco (NASDAQ:COCO [https://seekingalpha.com/symbol/COCO]) shares are nearly 4% higher in after-hours trading.

MORE ON VITA COCO

* The Vita Coco Company: Still On Hold Until The Trade Situation Uncertainty Is Over [https://seekingalpha.com/article/4810899-the-vita-coco-company-still-on-hold-until-the-trade-situation-uncertainty-is-over]
* The Vita Coco Company, Inc. (COCO) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4806407-the-vita-coco-company-inc-coco-q2-2025-earnings-call-transcript]
* Vita Coco: A Premium Beverage Growth Story With Justified Valuation [https://seekingalpha.com/article/4795093-vita-coco-premium-beverage-growth-story-with-justified-valuation]
* Vita Coco raises FY2025 net sales guidance to $565M–$580M amid strong coconut water growth and international momentum [https://seekingalpha.com/news/4475016-vita-coco-raises-fy2025-net-sales-guidance-to-565m-580m-amid-strong-coconut-water-growth-and]
* Vita Coco GAAP EPS of $0.38 beats by $0.03, revenue of $169M beats by $7.44M [https://seekingalpha.com/news/4474154-vita-coco-gaap-eps-of-0_38-beats-by-0_03-revenue-of-169m-beats-by-7_44m]