UBS reiterates Neutral rating on Molson Coors stock ahead of earnings

Published 29/07/2025, 16:04
UBS reiterates Neutral rating on Molson Coors stock ahead of earnings

Investing.com - UBS maintained its Neutral rating and $53.00 price target on Molson Coors (NYSE:TAP) ahead of the beer maker’s second-quarter earnings report scheduled for Tuesday, August 5. According to InvestingPro data, the stock currently trades at an attractive 10.9x earnings multiple, significantly below its peers.

The investment firm forecasts second-quarter earnings per share of $1.82, which falls $0.04 below consensus estimates, primarily due to lower top-line projections as beer demand remains sluggish across key markets. This cautious outlook aligns with InvestingPro data showing seven analysts have recently revised their earnings expectations downward.

UBS believes Molson Coors may lower its full-year guidance again, noting that while the fundamental outlook appears difficult, this challenge seems largely reflected in the current valuation of approximately 8 times next-twelve-months consensus EPS estimates.

The firm points out that positioning is having an outsized impact on earnings reactions this season, and with Molson Coors reportedly remaining a crowded short, UBS sees a more balanced risk/reward profile heading into the earnings announcement.

Despite an "intriguing" valuation, UBS indicates that without clearer signs of improving top-line trends, catalysts for share price appreciation will likely remain elusive.

In other recent news, Molson Coors Beverage Company announced that it will pay a quarterly dividend of $0.47 per share on its Class A and Class B common stock. The dividend is scheduled for September 19, 2025, with stockholders of record as of September 5, 2025, set to receive the payment. Meanwhile, Citi has reduced its price target for Molson Coors to $51.00 from $56.00, maintaining a Neutral rating due to anticipated pressure on the company’s topline performance in the second quarter of 2025. BofA Securities also downgraded Molson Coors from Buy to Neutral, adjusting its price target to $50.00, citing persistent volume declines in the U.S. beer industry. Additionally, Piper Sandler lowered its price target for Molson Coors to $53.00 from $58.00, maintaining a Neutral rating and highlighting a 5% decline in U.S. retail volumes year-to-date. The firm noted that the company is facing a challenging comparison against elevated shipment levels from the previous year. These developments indicate ongoing challenges for Molson Coors in the current market environment.

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