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On Friday, UBS analyst Peter Grom adjusted the price target for Molson Coors (NYSE:TAP) stock, reducing it to $59.00 from the previous $63.00, while retaining a Neutral rating on the shares. The adjustment came after Molson Coors reported first-quarter earnings per share (EPS) of $0.50, which did not meet the UBS estimate of $0.80 or the Visible Alpha consensus of $0.82. The miss was attributed to weaker organic sales growth and softer margins. According to InvestingPro data, six analysts have recently revised their earnings estimates downward, while the company maintains a modest P/E ratio of 10.9x.
The company also revised its full-year guidance downward, affecting revenue growth and EPS projections. Management attributed the shortfall to several factors, including macroeconomic pressures, declining volumes in the U.S. market, and a one-time transition cost associated with Fevertree. Following the announcement, Molson Coors shares declined by 5%. Despite these challenges, the company maintains a strong dividend track record, having paid dividends for 51 consecutive years, with a current yield of 3.46%.For deeper insights into Molson Coors’ financial health and growth potential, InvestingPro subscribers can access exclusive analysis and additional ProTips.
Despite the lower financial expectations, UBS notes that Molson Coors’ valuation remains broadly attractive when compared to its five-year historical average. The company currently appears undervalued according to InvestingPro’s Fair Value analysis, with a strong free cash flow yield of 10%. However, given the combination of a sluggish beer category, a challenging consumer and macroeconomic environment, and the disappointing earnings report and guidance, investors may adopt a cautious stance. UBS suggests that many may prefer a wait-and-see approach before taking a more positive view on the stock.
In other recent news, Molson Coors reported its first-quarter earnings for 2025, revealing a significant shortfall in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of $0.50, falling short of the anticipated $0.83, while revenue came in at $2.3 billion against a forecast of $2.42 billion. Following these results, Molson Coors revised its full-year guidance, now expecting low single-digit declines in net sales revenue and underlying pretax income. Analyst firms have responded to these developments with adjustments to their price targets for Molson Coors. Citi lowered its price target from $60 to $56, maintaining a Neutral rating, while Evercore ISI reduced its target from $64 to $60 but kept an Outperform rating. Both firms cited weaker-than-expected first-quarter results as a key factor in their revisions. Additionally, Molson Coors has adjusted its guidance for 2025, now anticipating a low single-digit percentage decrease in local currency sales and a similar decline in underlying pre-tax profit. These updates reflect the challenges Molson Coors faces in a competitive and evolving market landscape.
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