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On Thursday, Citi reaffirmed its Neutral stance on Molson Coors (NYSE:TAP) shares, maintaining a $57.00 price target. Following Molson Coors’ fourth-quarter 2024 earnings release, which surpassed expectations, the company’s stock is anticipated to respond positively. According to InvestingPro data, the stock currently trades at an attractive P/E ratio of 12.16, with a robust free cash flow yield of 10%. The company’s overall financial health score is rated as GOOD, suggesting solid fundamentals. The brewery giant reported a smaller decline in local currency sales than analysts had forecasted, with a drop of 1.9% compared to the expected 2.9%. This was aided by a stronger price/mix increase of 4.5%, which exceeded the 3.7% consensus. With a market capitalization of $11 billion and a track record of maintaining dividend payments for 50 consecutive years, Molson Coors demonstrates strong financial stability. For deeper insights into the company’s valuation and financial metrics, InvestingPro subscribers have access to over 30 additional financial metrics and expert analysis.
Molson Coors’ financial volumes fell by 6.4%, slightly better than the anticipated 6.6% reduction. In the Americas, the company’s depletions—a measure of distributor sales to retailers—declined by 2.2%, outperforming the consensus estimate of a 5.4% fall. Specifically, U.S. depletions were down by 3.0%, which was also more favorable than what analysts had feared.
Looking ahead, Molson Coors has set its 2025 guidance, which aligns with its long-term growth algorithm and is notably above market expectations. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, presenting a potential opportunity for investors. InvestingPro subscribers can access the comprehensive Pro Research Report, which provides detailed analysis of Molson Coors’ valuation metrics, growth prospects, and competitive position. The brewery forecasts low single-digit percentage growth in local currency revenue, mid-single-digit percentage growth in underlying pre-tax profit excluding foreign exchange impacts, and high single-digit percentage growth in underlying earnings per share. These projections contrast with consensus estimates, which were significantly lower, including expectations for revenue and pre-tax profit growth.
The company’s underlying earnings per share for the fourth quarter of 2024 reached $1.30, outshining the consensus of $1.13. This beat was attributed to stronger sales and improved gross and operating margins. In light of the earnings beat and optimistic 2025 guidance, Citi expects a clear positive reaction in Molson Coors’ share price. The details of the company’s performance and outlook were shared during a conference call held at 8:30 am ET today.
In other recent news, Molson Coors has experienced a series of analyst rating adjustments. Barclays (LON:BARC) maintained its Underweight rating on Molson Coors with a price target of $48.00, noting the company’s strong margin performance and ability to meet American volume forecasts. Citi, on the other hand, upgraded Molson Coors from Sell to Neutral, raising the price target to $57. This decision was influenced by the company’s expected favorable market share comparisons in the spring and the potential for high-single-digit percentage EPS growth in 2025. Lastly, BofA Securities upgraded Molson Coors from Neutral to Buy, with a price target of $70.00, based on expectations of a stable beer industry recovery in 2025. These are recent developments that reflect differing perspectives on Molson Coors’ financial performance and future outlook.
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