4.7 C
London
Sunday, January 29, 2023

Is it time to tap Molson Coors or are beer sales going flat?

Must read

‘We are on the brink of World War III’

Donald Trump took aim at President Joe Biden, Hunter Biden, US foreign policy and undocumented immigrants on Saturday as he kicked off his bid...

No-Code MVP Strategy, Scrutinizing Recruiting, A/B Growth Testing • londonbusinessblog.com

Americans spent nearly $20 billion on pizza delivery in 2021. Most of us could probably bake one at home, but speed and convenience are powerful...

Microsoft, GitHub and OpenAI are asking the court to drop the AI ​​copyright lawsuit

Microsoft, GitHub and OpenAI want the court to dismiss a proposed class action complaint accusing the companies of scraping licensed code to build GitHub's...

Is buying an old business a good idea?

Getting a business off the ground is difficult. Especially when your company has to meet age and business credit requirements...
Shreya Christinahttps://londonbusinessblog.com
Shreya has been with londonbusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider londonbusinessblog.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

Molson Coors drink (NYSE: TAP) is down more than 7% after the company released a mixed earnings report on Aug. Earnings for the adult beverage company came in at $1.19 per share. However, sales were a slight miss at $2.92 billion, while the forecast was to be $2.94 billion.


MarketBeat.com – MarketBeat

On a better note, management maintained its full-year revenue and profit forecast. But that may not be enough for investors who see the company trying to rely on its premium brands to lift it through a shaky economy.

In this article, we’ll look at what the company said and some things you may want to consider before taking or adding a position in TAP stock.

Premium sales grow

The good news is that earnings for Molson Coors are back to pre-pandemic levels. The company reports that this is due to a significant increase in on-site sales. Molson Coors reported that on-site sales are still not at pre-pandemic levels. However, it is at 93% of pre-pandemic levels and continues to increase revenue on a sequential basis.

As the company reported, this is part of the the company’s “premiumization strategy”. According to president and chief executive officer (CEO) Gavin Hattersley, the company’s “above-premium brands” contributed to a record-high share of net sales for our global portfolio on a 12-month trailing basis. And net sales from the company’s US high-premium portfolio now exceed net sales from the US economy portfolio on a trailing 12-month basis.

If this trend continues, it could dispel the trend that Molson Coors lacks pricing power as the popularity of craft beers continues to grow. But a convincing argument for this statement is the weakening of the global economy. There are already indications that consumers are starting to “trade in” to cheaper brands. However, if the economy continues to weaken, the company says it has a portfolio of brands that will allow the company to compete at different price levels.

The balance is getting stronger

Molson Coors continues to pay off his debts well. And as the company notes, the bulk of its $6.4 billion in net debt is of the fixed-rate variety. That means it is less affected by rising interest rates. However, guilt is guilt. And if the company can’t find a way to significantly increase revenue, it will still be a headwind to earnings.

So how likely is it that the company will continue to grow sales? On the one hand, Molson Coors acknowledges that it has to do with inflationary pressures. On the other hand, the company plans a price increase in the fourth quarter.

Fundamentals suggest TAP stocks are cheap

The company has a current P/E ratio of 10.97 and a future P/E ratio of just under 12x earnings. And the company’s profit margin of 10.13% is higher than the industry average of 6.61%.

Post-earnings analysts are lowering their price targets for TAP stocks. And at a current price of $54.19, the stock is trading above the consensus price target.

On the other hand, Molson Coors stock is up 19% in 2022, which is no small feat. And if the company delivers an upward surprise in earnings, the stock may reward investors. But if not, the TAP stock could remain in the range for several months.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

‘We are on the brink of World War III’

Donald Trump took aim at President Joe Biden, Hunter Biden, US foreign policy and undocumented immigrants on Saturday as he kicked off his bid...

No-Code MVP Strategy, Scrutinizing Recruiting, A/B Growth Testing • londonbusinessblog.com

Americans spent nearly $20 billion on pizza delivery in 2021. Most of us could probably bake one at home, but speed and convenience are powerful...

Microsoft, GitHub and OpenAI are asking the court to drop the AI ​​copyright lawsuit

Microsoft, GitHub and OpenAI want the court to dismiss a proposed class action complaint accusing the companies of scraping licensed code to build GitHub's...

Is buying an old business a good idea?

Getting a business off the ground is difficult. Especially when your company has to meet age and business credit requirements...

The Untold Truth of Reba McEntire’s Son

Known from moviesBlake Shelton Live: It's All About Tonight 2010as Miscellaneous Crew20/20 2012as Himself - Reba's Son (segment "Reba McEntire")Short...