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Investing.com - JPMorgan has assumed coverage of Molson Coors (NYSE:TAP) with a Neutral rating and a $49.00 price target. This target sits below the InvestingPro Fair Value estimate, suggesting the brewer may be undervalued at its current trading price of $44.09, which hovers just above its 52-week low of $42.94.
The financial services firm acknowledged that Molson Coors has significantly improved its business fundamentals over the past six years through its Revitalization and Acceleration Plans, which focused on core growth, portfolio premiumization, and expansion beyond beer. Despite these improvements, InvestingPro data shows the company is not profitable over the last twelve months, with a negative EPS of $10.36, though analysts predict a return to profitability this year.
JPMorgan noted that while the company’s strategy of prioritizing value over volume is logical, it could face challenges as Molson Coors remains heavily invested in struggling market segments within a beer category that shows limited signs of returning to historical growth trends. This strategy comes as the company’s revenue declined by 4.01% in the last twelve months.
The firm highlighted that recently appointed CEO Rahul Goyal, who played a key role in the company’s portfolio evolution, intends to increase focus on beyond-beer categories and appears willing to use the company’s balance sheet and cash flow to enhance overall performance. InvestingPro Tips reveal that management has been aggressively buying back shares, and the company boasts a strong free cash flow yield of 13%, potentially giving Goyal financial flexibility for his strategic initiatives. For investors seeking deeper insights, InvestingPro offers 8 additional ProTips and a comprehensive Research Report on Molson Coors.
JPMorgan also observed that actions taken thus far demonstrate Goyal’s urgency to make the organization more efficient and agile, citing the Americas business unit restructuring as an example. While navigating these changes, Molson Coors maintains its impressive 51-year streak of consecutive dividend payments, currently offering a 4.26% yield, with dividend growth of 6.82% in the last twelve months.
In other recent news, Molson Coors Beverage Company announced its third-quarter 2025 earnings, which did not meet analysts’ expectations. The company reported earnings per share of $1.67, slightly below the projected $1.71. Revenue for the quarter was $2.97 billion, falling short of the anticipated $3.04 billion. Despite these results, the company’s stock showed minimal movement in pre-market trading. There were no significant changes in analyst ratings following the earnings report. Investors will be watching for any future updates from Molson Coors to better understand the company’s performance trajectory. These developments are part of the ongoing financial landscape for the company.
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