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On Wednesday, Piper Sandler maintained a Neutral rating on Molson Coors Beverage Company (NYSE:TAP) shares, with a consistent price target of $67.00. According to InvestingPro analysis, the stock appears undervalued at current levels, trading at 11.5x earnings. The firm’s analysts identified several challenges facing the company, including unmeasured top-line growth headwinds and a decline in measured retail sales in the United States.
Molson Coors is contending with the discontinuation of approximately 1.9 million hectoliters of contract brewing volume from 2024, which is expected to impact its performance in 2025. Despite these challenges, InvestingPro data shows the company maintains a strong financial health score of "GOOD" with EBITDA of $2.48 billion in the last twelve months. Notably, around 30% of this volume was accounted for in the first quarter of 2024. Additionally, the company is facing the lapping of roughly 6 percentage points of inventory that was pulled forward into the first quarter of 2025.
Despite these headwinds, Piper Sandler anticipates potential margin benefits arising from a shift in the company’s product mix towards premium offerings and the termination of contract brewing. In light of these factors, the firm has adjusted its earnings per share (EPS) estimates for Molson Coors. The 2025 EPS forecast has been reduced from $6.32 to $6.27, and the 2026 EPS projection has been revised from $6.75 to $6.69.
The $67 price target set by Piper Sandler corresponds to approximately 10 times the company’s projected earnings for 2026. The analysts’ evaluation reflects the anticipated challenges and changes within Molson Coors’ operations and market conditions.
In other recent news, Molson Coors Beverage Company reported a strong fourth quarter for 2024, with earnings per share (EPS) of $1.30, surpassing analyst projections of $1.13. The company’s revenue also exceeded expectations, reaching $2.74 billion against a forecast of $2.71 billion. Analyst firm TD Cowen noted the company’s smaller-than-expected decline in organic sales, with a decrease of 1.9% compared to the anticipated 3.3% drop, and highlighted a lower effective tax rate as a key factor in the earnings beat. Molson Coors has set its 2025 outlook, projecting low single-digit growth in sales and high single-digit growth in EPS, aligning with its long-term growth strategy.
Analyst firm Bernstein raised its price target for Molson Coors to $65.00, maintaining a Market Perform rating, following the company’s robust fourth-quarter performance. Meanwhile, TD Cowen also adjusted its price target to $60.00 while keeping a Hold rating, reflecting a cautious stance on growth potential due to industry challenges. Additionally, Molson Coors announced the upcoming retirement of Julia M. Brown from her position as a Class A Director, a decision driven by her desire to focus on global philanthropic endeavors. These developments provide insight into Molson Coors’ strategic direction and recent performance, which are crucial for investors and stakeholders.
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