2023-05-24 09:15:57 ET
Molson Coors ( NYSE: TAP ) was added as a new long idea at Hedgeye, which sees the potential for 30% upside for the beer company.
"Memorable marketing campaigns have often centered on market share wars, rather than growing the market," Hedgeye analyst Daniel Biolsi wrote in a note on Wednesday. "In this challenging backdrop, Bud Light committed a historic marketing fiasco of its own doing. Molson Coors is the key beneficiary for the new customers up for grabs as seen in the off-premise scanner data. "
The Hedgeye note comes as Anheuser Busch InBev ( BUD ) sales continue to slide into the month of May as a consumer backlash continues against some of its more popular brands amid the controversy with transgender influencer Dylan Mulvaney. According to Nielsen data, Bud Light volume declined sales edged down 24.6% in the week ended May 13 as compared to the same period in 2022, accelerating from a 23.6% decline in the first comparable week of the month.
"Our EPS estimates for the year are considerably ahead of consensus expectations," Hedgeye's Biolsi wrote. "Driving our estimates are higher U.S. volumes and the fixed cost leverage of a manufacturer budgeting for volume declines. The current valuation implies the company will not be able to hold onto the market share gains. We see a path for Molson Coors to build on the gains rather than give them back."
More on Anheuser Busch
- AB InBev pricing actions aid earnings beat, reaffirmed full-year guidance
- Anheuser-Busch InBev Earnings Call Transcript
- AB InBev stock slide amid Bud Light backlash ‘overdone’ - Citi
- Molson Coors to benefit from Bud Light controversy - Evercore
- Anheuser-Busch CEO responds amid Bud Light ad controversy
- Bud Light ad controversy could sting suppliers - Truist
- Bud Light marketing executive takes leave of absence amid ad controversy
For further details see:
Molson Coors a new long idea at Hedgeye, key beneficiary of Bud Light controversy