Boston Beer price target lowered to $230 from $285 at Citi on weak sales

Investing.com - Citi has lowered the price target on Boston Beer Company (NYSE:SAM) to $230.00 from $285.00 while maintaining a Buy rating on the stock. Currently trading at $192.55, the stock has declined 36% year-to-date and is hovering near its 52-week low of $185.34. According to InvestingPro analysis, the stock appears undervalued at current levels.

The price target reduction comes as Citi expects Boston Beer to report soft results for the second quarter of 2025, with shipments and depletions estimates revised downward to -6.5% and -7.5% year-over-year, respectively. The company is set to report earnings on July 24, with InvestingPro data showing 7 analysts have recently revised their earnings expectations downward.

Citi notes significant weakness in the company’s Twisted Tea and Truly brands, which was only partially offset by the rollout of Sun Cruiser. Scanner volume trends for Boston Beer sharply decelerated by approximately 500 basis points in the 10 weeks following the company’s first-quarter earnings call.

For the second quarter, Boston Beer’s scanner volumes were down 7.4% compared to a 3.5% decline in the first quarter of 2025, although Citi mentions that second-quarter depletions will likely benefit from a calendar shift tailwind due to the later Easter in 2025.

Citi projects Boston Beer’s second-quarter gross margin to be 46.2% (up 20 basis points year-over-year), operating margin at 9.4% (down 280 basis points year-over-year), and earnings per share of $3.43, below the consensus estimates.

In other recent news, Boston Beer Company reported a strong performance for Q1 2025, with earnings per share (EPS) of $2.16, significantly surpassing the forecasted $0.6342, and a 6.5% increase in revenue. The company’s revenue reached $436.34 million, driven by product innovations and increased shipments, despite a 1% decrease in depletions. Meanwhile, Goldman Sachs maintained a Sell rating on Boston Beer, citing deteriorating volume trends and limited visibility on Truly’s path to stabilization, which led them to lower shipment, depletion, and earnings estimates for upcoming quarters. On the other hand, Bernstein analysts adjusted their price target for Boston Beer shares to $270 from $275, retaining a Market Perform rating, noting the company’s mixed sales performance. Additionally, Boston Beer has expanded its cannabis beverage lines, TeaPot and Emerald Hour, in Canada, introducing new high-potency offerings. These developments reflect Boston Beer’s strategy to diversify its portfolio and explore emerging consumer trends. Investors will be closely watching the company’s upcoming quarterly reports to assess the impact of these strategic initiatives on its overall performance.

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