Colorado-based Molson Coors Beverage Company (TAP) manufactures, markets, and sells beer and other malt beverage products under various brands. Valued at $11.4 billion by market cap, TAP produces many beloved and iconic beer brands, including Coors Light, Miller Lite, Madri, Staropramen, Miller High Life and Keystone, and more.
Shares of this brewing giant have underperformed the broader market considerably over the past year. TAP has declined 15.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.8%. In 2024 alone, TAP stock plunged 13%, while SPX is up 17.8% on a YTD basis.
Narrowing the focus, TAP has also lagged behind the First Trust Nasdaq Food & Beverage ETF (FTXG). The exchange-traded fund has declined marginally over the past year. Moreover, the ETF’s 3.8% gains on a YTD basis outshine the stock’s double-digit dip over the same time frame.
TAP’s weak price momentum can be attributed to a decrease in financial volume, adverse effects of foreign currency, as well as soft financial and brand volumes led by lower contract brewing volumes.
On Aug. 6, TAP shares closed up more than 5% after reporting its Q2 earnings results. Its underlying EPS of $1.92 surpassed Wall Street’s expectations of $1.68. The company’s adjusted revenue was $3.3 billion, exceeding forecasts of $3.2 billion. TAP reaffirmed its full-year guidance and expects a low single-digit revenue increase year over year on a constant currency basis. It expects a mid-single-digit increase year over year for underlying EPS.
For the current fiscal year, ending in December, analysts expect Molson Coors’ EPS to grow 5.9% to $5.75 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
However, among the 16 analysts covering TAP stock, the consensus is a “Hold” overall. That’s based on three “Strong Buy” ratings, 10 “Holds,” and three “Strong Sells.”
This configuration is less bullish than a month ago, with four analysts suggesting a “Strong Buy.”
On Aug. 14, Citigroup Inc. (C) analyst Filippo Falorni maintained a “Sell” rating on TAP with a price target of $47.
The mean price target of $59.50 represents an 11.7% premium from TAP’s current price levels. The Street-high price target of $75 suggests an ambitious upside potential of 40.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
