Molson Coors Brewing Company (NYSE: NYSE:TAP) had its price target adjusted by a market analyst from TD Cowen.
The firm reduced the target to $56.00, down from the previous figure of $58.00, but kept a Hold rating on the stock. The adjustment follows a review of the company's future sales and earnings prospects.
The analyst from TD Cowen revised expectations for Molson Coors, citing a slowdown in U.S. market trends. Specifically, the forecast for the company's organic growth for the fiscal year 2024 was adjusted from a slight increase to a decrease, shifting from +1% to -1%. Additionally, the estimated earnings per share (EPS) were reduced by $0.26 to $5.50, below the FactSet consensus of $5.72.
The analyst pointed to decelerating third-quarter scanner trends in the U.S. as a key factor for both the overall category and Molson Coors in particular. This slowdown is expected to lead to lower than previously anticipated low single-digit (LSD) organic growth and mid single-digit (MSD) EPS for the fiscal year 2024.
Furthermore, the analysis indicated potential challenges for Molson Coors extending into the fiscal year 2025. The concerns stem from technical volume headwinds and a continuation of the category's weakness, which could lead to underperformance relative to the consensus expectations for that period.
In other recent news, Molson Coors is facing a variety of developments. Piper Sandler maintained a Neutral rating on the beverage company despite a slowdown in U.S. retail sales. The firm adjusted its earnings per share estimates for Molson Coors, reducing the 2024 forecast from $5.80 to $5.77 and the 2025 projection from $5.93 to $5.90.
Additionally, the company experienced a downgrade from TD Cowen, moving the rating from Buy to Hold due to weaker than expected market share gains. On the financial front, Molson Coors reported a marginal decline in net sales revenue by 0.1% in the second quarter, while underlying pretax income and earnings per share saw increases of 5.2% and 7.9%, respectively.
In a separate development, Tilray (NASDAQ:TLRY) Brands has made a strategic move to diversify its product offerings by acquiring four craft breweries from Molson Coors. This acquisition is expected to grow Tilray's new beer accounts by 30% according to recent developments. The breweries include Hop Valley Brewing Company, Terrapin Beer Co., Revolver Brewing, and Atwater Brewery.
InvestingPro Insights
While TD Cowen has adjusted its outlook for Molson Coors, recent data from InvestingPro offers a more nuanced perspective on the company's financial health. Despite the anticipated slowdown in U.S. market trends, Molson Coors maintains a strong dividend profile. An InvestingPro Tip highlights that the company has maintained dividend payments for an impressive 50 consecutive years, showcasing its commitment to shareholder returns even in challenging market conditions.
Additionally, Molson Coors' valuation metrics suggest potential value for investors. The company's P/E ratio stands at 10.22, which is relatively low compared to industry averages. This is further supported by another InvestingPro Tip indicating that the stock is trading at a low earnings multiple, potentially signaling an attractive entry point for value-oriented investors.
From a profitability standpoint, Molson Coors has demonstrated resilience. The company's revenue for the last twelve months as of Q2 2024 was $11.94 billion, with a gross profit margin of 39.14%. These figures suggest that despite market headwinds, Molson Coors continues to generate substantial revenue and maintain healthy profit margins.
For investors seeking more comprehensive analysis, InvestingPro offers additional insights with 7 more tips available for Molson Coors, providing a deeper understanding of the company's financial position and market outlook.
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