On Tuesday, Jefferies adjusted its outlook on Boston Beer Company (NYSE:SAM), reducing the stock price target from the previous $365.00 to $325.00. Despite this change, the firm maintained a Hold rating on the company's shares.
The revision anticipates a neutral first quarter for the brewer, with expectations that depletions and shipments will continue to show weakness, following a trend of deceleration in the fourth quarter.
Boston Beer's Twisted brand has experienced a slowdown in gains, although it remains positive, while the Truly brand is facing ongoing challenges, including double-digit percentage distribution losses that began last fall and are expected to impact the spring season.
Jefferies has accordingly adjusted its first-quarter growth and earnings per share (EPS) estimates for Boston Beer to approximately flat, with an EPS of $0.11, compared to the Street's consensus of roughly flat growth and a negative EPS of $0.08. The current estimates by Jefferies reflect a more cautious stance than the consensus.
The report by Jefferies comes ahead of Boston Beer's earnings report, which is scheduled to be released after the market closes on April 25, 2024. Despite the lowered financial targets, Jefferies does not anticipate any changes to the company's guidance for the fiscal year 2024, which was initially provided with a degree of conservatism by the management.
Boston Beer's performance in the market will be closely watched following the release of its quarterly results, as investors and analysts assess the impact of the company's brand dynamics on its financial health and market position.
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