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Investing.com - Piper Sandler lowered its price target on Molson Coors (NYSE:TAP) stock to $53.00 from $58.00 on Monday, while maintaining a Neutral rating on the brewing company. The stock, currently trading at $47.48, appears undervalued according to InvestingPro analysis, with a P/E ratio of 10.36x and an attractive dividend yield of 3.91%.
The firm cited slowing retail momentum for the beer maker, noting that Molson Coors' second-quarter U.S. retail volumes are down approximately 5% year-to-date. Piper Sandler also pointed out that the company is comparing against elevated shipment levels from the same period last year.
Rising aluminum prices are creating additional cost pressures for Molson Coors, with elevated Midwest Premium rates that the firm described as "difficult to hedge." The U.S. beer category continues to face pressure from macroeconomic factors and broader societal shifts in consumption patterns.
Piper Sandler reduced its earnings per share estimates for Molson Coors, lowering its 2025 EPS forecast from $6.03 to $5.90 and its 2026 EPS projection from $6.49 to $6.35. The new price target of $53 represents approximately 9.0 times the firm's estimated 2026 earnings per share.
The revised outlook comes as Molson Coors, whose brands include Coors Light, Miller Lite, and Blue Moon, navigates challenging industry conditions affecting major beer producers across the U.S. market.
In other recent news, Molson Coors reported its first-quarter earnings for 2025, which fell short of expectations. The company posted earnings per share (EPS) of $0.50, significantly below the anticipated $0.83, and revenue of $2.3 billion against a forecast of $2.42 billion. As a result, Molson Coors revised its full-year guidance, now expecting low single-digit declines in net sales revenue and underlying pretax income, while anticipating low single-digit growth in underlying EPS. Analysts responded to these results by adjusting their price targets for Molson Coors. UBS reduced its price target to $59 from $63, maintaining a Neutral rating, citing weaker organic sales growth and softer margins. Citi also lowered its target to $56 from $60, expressing skepticism about the company's outlook for the remainder of 2025. Evercore ISI adjusted its price target to $60 from $64 but retained an Outperform rating, noting the challenges Molson Coors faces in maintaining market share amid increased competition. Despite these challenges, Molson Coors aims to continue its premiumization strategy and expand its non-alcoholic beverage portfolio.
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