Morgan Stanley started off coverage on Molson Coors Beverage Company ( NYSE: TAP ) with an Equal-weight rating.
Analyst Eric Serotta warned that sustainable top line growth for Molson Coors ( TAP ) is likely to remain elusive due to structurally challenged segment exposure. The firm also sees downside potential for earnings estimates from commodity pressure and reinvestment.
"While we are encouraged by TAP's progress against its Revitalization Plan, including improved core brand share trends and momentum for its above-premium portfolio, we are not convinced that TAP can deliver longer-term sustainable organic top line growth given its structurally challenged segment and geographic exposure."
Serotta and team also question the sustainability of momentum for Topo Chico Hard Seltzer and Simply Spiked, with Topo Chico's volume noted to have slowed even before it laps last year's national launch and consumers notoriously fickle in the space.
Morgan Stanley assigned a price target of $51 to TAP.
Shares of Molson Coors ( TAP ) fell 0.52% premarket to $53.30.
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Molson Coors draws cautious first ratings look from Morgan Stanley