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On Thursday, Goldman Sachs reaffirmed its Buy rating on Molson Coors (NYSE:TAP) with a steady price target of $75.00. Currently trading at $53.45, InvestingPro analysis suggests the stock is undervalued, with a P/E ratio of just 12.16. The endorsement follows the company’s robust fourth-quarter performance, which surpassed expectations, particularly in the Americas region. Molson Coors’ earnings per share (EPS) for the quarter were reported at $1.30, outpacing the consensus estimates of $1.12 and $1.13 by Goldman Sachs and FactSet, respectively. The company has demonstrated strong financial health, maintaining a solid 38.77% gross profit margin and generating an impressive 10% free cash flow yield over the last twelve months. This earnings beat was attributed in part to a lower tax rate.
The company’s strong quarter was marked by a better-than-anticipated volume performance in the Americas, which helped to mitigate weaker results in the Europe, Middle East, and Africa (EMEA) and Asia-Pacific (APAC) regions. This balanced performance contributed to a margin and EPS that exceeded forecasts.
Looking to the future, Molson Coors’ management has set forth an optimistic full-year 2025 guidance, signaling a shift from previous years. The guidance suggests improved operating leverage, which is expected to have a positive impact on the bottom line. InvestingPro subscribers can access 8 additional key insights about Molson Coors, including its impressive 50-year dividend maintenance streak and a current dividend yield of 3.29%. This forward-looking stance indicates that consensus estimates for FY25 will likely need to be revised upward.
Goldman Sachs analysts believe that the combination of the strong quarterly results and promising guidance for FY25 will be well-received by the market, predicting that Molson Coors’ stock will rise on Thursday. The firm’s position is that the current risk/reward profile for the stock is favorable and anticipates that the stock will experience a re-rating as clarity on category trends improves. For comprehensive analysis including Fair Value estimates and detailed financial metrics, investors can access the full Pro Research Report available on InvestingPro.
In other recent news, Molson Coors Beverage Company has been the subject of multiple analyst reports. JPMorgan maintained a neutral rating for Molson Coors with a steady price target of $58, recognizing the company’s strong guidance for 2025 and its better-than-expected fourth-quarter results for 2024. Citi also reaffirmed its neutral stance on Molson Coors, maintaining a $57 price target, and highlighted the company’s smaller decline in local currency sales and stronger price/mix increase than analysts had forecasted.
Barclays (LON:BARC) reiterated its underweight rating on Molson Coors, with a consistent price target of $48. The firm applauded Molson Coors’ robust margin performance, attributing it primarily to gross margin improvements. BofA Securities upgraded Molson Coors from neutral to buy, increasing the price target to $70, citing a predicted return to normalcy for the broader beer industry in 2025.
These recent developments reflect a variety of perspectives from different analyst firms. They underline Molson Coors’ resilience and potential growth despite sector-wide challenges and highlight the importance of the company’s upcoming investor events in shaping future sentiment.
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