BellRing Brands' (BRBR) Premier Protein and Coca-Cola's (KO) Core Power are driving growth for the ready-to-drink protein shake category with consumption expanding from niche markets like gyms and hospitals into mainstream retail, BofA Securities said in a note on Tuesday.

The investment firm said BellRing Brands could consider partnering with a direct-store-distribution company to accelerate growth and that management has discussed this potential strategy to unlock higher sales and market penetration.

"A distribution deal would provide PepsiCo (PEP) or Keurig Dr Pepper (KDP) that entry, while providing means for BellRing Brands to expand into non-mass/club," BofA said.

If the company expands distribution, has retailers carrying all 14 flavors that it has available, and keeps the velocity unchanged it could lead to retail sales generating a compounded annual growth rate of 17% over three years, according to the note.

BofA said Premier could see higher foot traffic and volume lift if it improves its promotional efforts, such as through end-cap displays and price promotions.

"Premier has seen a higher incremental volume lift from displays year to date compared to Core Power," the firm said.

BofA raised its price target to $75 from $67 and reiterated its buy rating.

The company shares were up 3.5% in recent trading.

Price: 65.98, Change: +2.22, Percent Change: +3.49