Beer might be at the center of the current culture wars, but that doesn’t mean people stopped drinking the brew. Rather, they’re just being pickier about which brand, and that has been good news for
Molson Coors Beverage.
Analysts at Citigroup lifted their stock price target on the brewer of Coors by $7 to $72 apiece as the company continues to benefit from the recent backlash against
Anheuser-Busch InBev
(ticker: BUD).
After an April 1 Instagram post by transgender social-media influencer Dylan Mulvaney, which depicted a personalized can of Bud Light, some conservative critics called for a boycott on Bud. Since then, Molson (ticker: TAP) has seen a 15.8% increase in sales growth, while Anheuser-Busch has experienced a 10.5% decline. Although Molson’s stock has already gained 28% since early April, analysts say the good times can continue.
“We expect the impact of the controversy to last through the summer, including the July 4 holiday (which is the highest consumption holiday for beer), which should result in upside for sales and profitability, notably not yet reflected in TAP’s guidance,” analysts wrote while maintaining their Neutral rating on shares in light of the price target hike. Citigroup analysts expect that Molson’s earnings will total $4.70 a share this year, which is above the $4.34 per share forecast by analysts surveyed by FactSet.
Citigroup isn’t alone in being bullish on Molson. Last week, analysts at CFRA lifted their rating on shares to Strong Buy from Buy, while boosting their price target by $10 to $80. That followed a rating upgrade to Neutral from Underperform by analysts at BofA Securities who also lifted their price target on shares by $14 to $68 apiece.
Molson shares were down 0.1% in afternoon trading Wednesday while Anheuser-Busch shares slid 0.3%. The
S&P 500
was down 0.5%.
Write to Carleton English at [email protected]
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