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On Thursday, Evercore ISI made a revision to the price target for Molson Coors (NYSE:TAP), bringing it down to $60.00 from the previous $64.00. Despite the adjustment, the firm maintained an Outperform rating on the stock. According to InvestingPro analysis, the stock appears undervalued at its current price of $54.26, with a perfect Piotroski Score of 9 indicating strong financial health. The reduction comes in response to weaker than anticipated first-quarter results, with the company’s Americas organic sales dropping by 11.5% against the expected 7.3% decline. This downtrend was not isolated to the U.S. market; the Europe, Middle East, and Africa (EMEA), as well as Asia-Pacific (APAC) regions, also experienced a slump in organic sales by 4.9%, which was below the forecasted 1.2% growth. Despite these challenges, InvestingPro data shows the company maintains strong fundamentals with an attractive P/E ratio of 10.75 and a robust free cash flow yield of 11%.
These disappointing figures prompted Molson Coors to revise its full-year outlook. The company now expects organic sales to decrease by a low-single-digit percentage, a change from its previous expectation of a low-single-digit increase. Similarly, the constant currency earnings per share (EPS) growth projection has been adjusted to a low-single-digit increase from the previously anticipated high-single-digit rise.
The revised outlook is underpinned by several factors, including the need for U.S. beer demand to rebound to near its historical low-single-digit volume declines for the stock to perform well. Additionally, Molson Coors must maintain its market share gains and achieve growth from a higher base. This comes amid increased investment from Anheuser-Busch InBev (EBR:ABI) in Michelob Ultra and efforts to win back Bud Light customers.
In light of these challenges, Evercore ISI has lowered its EPS estimates for Molson Coors by approximately 5%. The new price target of $60 is based on around 10 times the projected 2025 EPS and a 10% free cash flow yield, as stated by the research firm. The updated financial outlook and price target reflect the pressures faced by Molson Coors in a competitive and changing market landscape. Notably, the company maintains a solid 3.31% dividend yield and has consistently paid dividends for 51 consecutive years. For deeper insights into Molson Coors’ financial health and valuation metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Molson Coors Beverage Company reported a challenging first quarter in 2025, with both earnings per share (EPS) and revenue falling short of analyst expectations. The company posted an EPS of $0.50, significantly below the anticipated $0.83, and revenue came in at $2.3 billion, missing the forecasted $2.42 billion. This performance marks a substantial decline, with consolidated net sales revenue decreasing by 10.4% year-over-year and underlying pretax income dropping by 49.5%. In response to these results, Molson Coors revised its full-year guidance, now expecting low single-digit declines in net sales revenue and underlying pretax income. Despite these setbacks, the company aims for low single-digit growth in underlying EPS. Analysts from firms such as Bank of America and Goldman Sachs have scrutinized these developments, with discussions highlighting the macroeconomic pressures impacting the beer industry. Molson Coors continues to focus on its premiumization strategy, targeting growth in above-premium segments and expanding its non-alcoholic beverage portfolio. The company remains optimistic about its long-term growth, despite the current challenges.
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