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On Friday, Citi analyst Filippo Falorni adjusted the price target for Molson Coors (NYSE:TAP) stock, reducing it to $56.00 from the previous $60.00, while reiterating a Neutral rating on the shares. The revision follows Molson Coors’ first-quarter earnings for 2025, which fell short of expectations, with local currency sales dropping 10.4%, a steeper decline than the 5.8% consensus of Visible Alpha and Citi’s own forecast of a 6.7% decrease. Despite recent challenges, InvestingPro data shows the company maintains a perfect Piotroski Score of 9, indicating strong financial health, and trades at an attractive P/E ratio of 11.4x. Additionally, U.S. depletions slid by 8.8%, including a 1.4 percentage point impact from trading days, which also did not meet projections.
Molson Coors has also revised its guidance for the year 2025, now anticipating a low single-digit percentage (LSD%) decrease in local currency sales, compared to the previous expectation of a similar increase. The company’s underlying pre-tax profit excluding foreign exchange is also projected to fall by an LSD% instead of the mid-single-digit percentage (MSD%) increase previously forecasted. With a market capitalization of $11 billion and current EBITDA of $2.36 billion, InvestingPro analysis suggests the stock is currently undervalued, offering potential upside for value investors. Furthermore, the underlying earnings per share (EPS) growth projection has been moderated to an LSD% increase from the earlier high single-digit percentage (HSD%) estimate.
Falorni expressed skepticism regarding the company’s outlook for the remainder of 2025, noting that the updated guidance still depends on an improvement in the beer category after the first quarter and the maintenance of market share and shelf space. Given the weak trends in the category and the impact of the termination of a contract brewing agreement, the analyst does not foresee the implied acceleration in top-line growth for the second half of 2025.
As a result of these factors, Citi has lowered its 2025 EPS estimate for Molson Coors to $6.05. The new price target of $56 reflects lower anticipated revenue and margins due to expected volume deleverage. Despite the adjustments, Citi’s stance on Molson Coors’ stock remains Neutral.
In other recent news, Molson Coors reported its first-quarter earnings for 2025, which fell short of expectations, revealing an earnings per share (EPS) of $0.50, significantly below the anticipated $0.83. The company’s revenue also missed forecasts, coming in at $2.3 billion compared to the expected $2.42 billion. These results have led Molson Coors to revise its full-year guidance, now anticipating low single-digit declines in net sales revenue and underlying pretax income. Despite the challenging quarter, the company expects low single-digit growth in underlying EPS for the year.
In response to these developments, Evercore ISI revised its price target for Molson Coors, lowering it from $64.00 to $60.00, while maintaining an Outperform rating. The adjustment reflects weaker-than-expected first-quarter results, including a notable decline in organic sales across several regions. Molson Coors has also adjusted its full-year outlook, now expecting organic sales to decrease by a low-single-digit percentage, a shift from the previous expectation of an increase.
The company is facing increased competition, particularly from Anheuser-Busch InBev (EBR:ABI), which is investing in Michelob Ultra and attempting to regain Bud Light customers. Molson Coors is focusing on its core brands and expanding into non-alcoholic beverages as part of its strategy to navigate the current market challenges. Despite the setbacks, Molson Coors remains committed to its long-term growth plans, aiming to achieve one-third of net sales from above-premium segments.
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