2023-05-02 15:37:16 ET
Molson Coors ( NYSE: TAP ) guidance could prove conservative as a backlash against Anheuser Busch ( BUD ) owned Bud Light boosts its light beer depletions, according to Roth MKM.
Equity analyst Bill Kirk reiterated a Buy rating on the stock, applauding the earnings beat and reiteration of full-year guidance. On the latter point, he noted that there may be concern about the lack of a raised forecast given the strong start to the fiscal year. However, Kirk indicated that management may merely be exercising a degree of caution, leaving open the possibility of upside surprises as the year progresses.
“Volume performance, even adjusted for an extra selling day, was much better than prior quarters. Importantly, this 1Q beat comes before U.S. demand shifted away from Bud Light and toward Miller Lite and Coors Light. While guidance was reaffirmed, we believe there is considerable upside to numbers,” he told clients. “A more efficient marketing budget makes the P&L ripe for volume leverage.”
To be sure, not all analysts were in agreement. JP Morgan analyst Andrea Teixeira wrote that the upside from the shift away from Bud Light is already reflected in the share price. Additionally, she indicated the reiteration of guidance is likely prudent given the macroeconomic uncertainty ahead and a reliance on pricing actions. Teixeira maintains a Sell-equivalent rating on the stock.
Shares of Molson Coors ( TAP ) moved 7.49% higher shortly before Tuesday’s market close?
Read more on the backlash against Bud Light and its impact on sales in April .
For further details see:
Bud Light backlash could drive upside for Molson Coors - RothMKM