Latest news with #GavinHattersley
Yahoo
4 days ago
- Business
- Yahoo
Molson Coors Beverage Company (TAP): A Bull Case Theory
We came across a bullish thesis on Molson Coors Beverage Company on slo capital's Substack by Justin. In this article, we will summarize the bulls' thesis on TAP. Molson Coors Beverage Company's share was trading at $49.22 as of August 5th. TAP's trailing and forward P/E were 9.90 and 8.08, respectively according to Yahoo Finance. A closeup shot of a beer tap pouring a golden lager. Molson Coors (TAP) is trading at a market cap of about $9.8 billion, far below its estimated $16 billion book break-up value, creating a deep value opportunity. The company owns iconic brands like Coors Light, which alone could be worth $8–9 billion at typical 8–10× EBITDA multiples seen in beer M&A deals, nearly covering the entire current market cap. Its other strong brands, including Miller Lite, Blue Moon, and Simply Spiked, reinforce Molson Coors' competitive moat through entrenched shelf space, national logistics, and sticky consumer habits, as evidenced by Coors Light and Miller Lite retaining over 80% of share gains following the Bud Light controversy. Under CEO Gavin Hattersley, the company has executed its Acceleration Plan by premiumizing its portfolio, reducing leverage to 2.1× net debt/EBITDA, restoring and growing its dividend at a 3.9% yield, and generating $1.24 billion in free cash flow in 2024, translating to a robust 12%+ FCF yield. At approximately 8.5× underlying pre-tax earnings, TAP trades well below peers at 15–18× EV/FCF, signaling significant upside potential, particularly if volumes rebound or a strategic buyer emerges. Risks include flat overall beer consumption, input cost volatility, and execution challenges in beyond-beer segments, but hedging programs, pricing power, and disciplined capital allocation mitigate these concerns. With sustainable dividends, opportunistic buybacks, and a conservative reinvestment strategy, Molson Coors offers a compelling case of paying 'yard sale prices' for a 150-year-old portfolio of enduring brands. The risk/reward profile suggests substantial rerating potential once the market recognizes the intrinsic value of these assets. Previously, we covered a bullish thesis on Molson Coors Beverage Company (TAP) by Tyler Moody in September 2024, which highlighted its stable mid-cap status, conservative financing, and modest undervaluation based on operating profits and DCF analysis. The stock has depreciated about 11% since then, but the thesis holds due to defensive characteristics. Justin shares a similar view but stresses deep value, premiumization, and strong free cash flow. Molson Coors Beverage Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held TAP at the end of the first quarter which was 39 in the previous quarter. While we acknowledge the potential of TAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Molson Coors stands by 'cyclical' stance on US beer downturn
The ongoing pressure on beer sales in the US is 'cyclical', Molson Coors' CEO has insisted, after the company's sales suffered in the second quarter. Muted demand in the US – which Molson Coors had expected to see improve in the second quarter – was a factor in the company's changes to forecasts. In the three months to the end of June, Molson Coors' volumes dropped 6.6% amid lower brand volumes in the US and the end of a contract brewing deal. The decline was better than Wall Street had forecast but, speaking to analysts after the results were published, Molson Coors CEO Gavin Hattersley – who said in May he expected the US beer industry to pick up – conceded trading conditions had not improved. 'The industry did not get better as we were expecting it to,' he said. 'We had expected it to navigate back to where it's been for the last few years of around down 3% and it didn't. 'Certainly, consumer confidence and the macro environment, whilst we continue to believe very strongly that it is cyclical, we're not seeing any signs of that changing in the balance of the year, and it certainly didn't in the second quarter.' Molson Coors' previous expectation that the US beer industry would return to the recent run-rate of a 3% decline had 'faced with considerable scepticism last quarter – and for good reason', Barclays analyst Lauren Lieberman said in a note to clients today. She added: 'Molson Coors' updated outlook strikes us as now rooted in a more reasonable view on the US beer industry's near-term trajectory.' Hattersley told analysts on yesterday's post-results call that 'the current industry decline is cyclical', adding 'Consumer confidence will turn I don't know when but it will turn.' Nevertheless, the Molson Coors CEO was pushed on whether the pressure on the US beer industry was cyclical given soft volumes in the sector for the past few years. Hattersley said: 'We continue to believe that over time, [consumer confidence] will change. I mean, it could be sooner rather than later, or it could be in the same time period next year. The items that have been impacting the overall alcohol category – I've often heard GLP-1s talked about - we don't have a lot of data that suggests that that's having any meaningful impact on either the alcohol category or our category at this point. 'The other item that gets talked about is D9 [Delta 9]. The impact of D9 does vary by market. In some markets, it's not sold. In others, it carries strong restrictions. That's certainly an area that we continue to monitor the impact of that. I think consumer confidence has had a disproportionate impact, as I said, across some consumers differently to others. And, again, we believe that that is cyclical.' Hattersley said Molson Coors' 'core power brands' in the US – Coors Light, Miller Lite and Coors Banquet – had retained the 'unprecedented shelf space gains' achieved in spring of 2024 when Anheuser-Busch InBev's sales were hit by a marketing controversy. 'Banquet in particular, has been a strong performer. After 16 consecutive quarters of share growth, it was a top 5 volume share growth brand in the quarter. And given it's only about half the buying outlets of Coors Light, we believe there is significant distribution runway ahead,' he added. During the second quarter, volumes in EMEA and APAC missed Wall Street expectations and were another contributor to the new sales and earnings forecasts issued by the Madri owner. The volumes from Molson Coors' combined EMEA and APAC division fell 7.8%. The company pointed to 'soft market demand and a heightened competitive landscape'. Asked for more detail on the division's performance and the company's outlook for that side of the business, Hattersley pointed to competitive pressure in the UK and said the beer market in central and eastern Europe 'remains sluggish'. He added: 'The market in the U.K. continues to decline in both channels. We have seen a little bit of a category improvement quarter-to-date, starting to see some trend improvement in our share trajectory. 'Competition in the marketplace, it remains intense, frankly. And despite the increase that we've seen in promotional frequency in the off-premise with our largest brand, it does remain challenged given the actions of some of our competitors, which we have chosen not to follow. I mean we're seeing some of our competitors in that space price consistently 20% lower than Carling on shelf.' Madri volumes in the UK increased 'mid-single digits', Hattersley noted. He added: 'We continue to remain optimistic about the growth potential for our central and eastern European businesses. We're putting investments behind our national power brands and we're supporting the recent launches that we have in the above-premium space.' "Molson Coors stands by 'cyclical' stance on US beer downturn" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Post
6 days ago
- Business
- New York Post
Molson Coors slashes outlook again, blames Trump tariffs on aluminum
Molson Coors slashed its financial outlook for the second time this year, with the brewing company blaming new tariffs on aluminum for mounting cost pressures that are squeezing the already beleaguered beer industry. The Denver-based brewer said Tuesday it expects net sales to tumble between 3% and 4% this year, a steeper decline than the company's earlier prediction of a 1% drop. Even more concerning for investors, earnings before taxes are projected to plummet 12% to 15%, compared to previous forecasts of only minor decreases. Advertisement Gavin Hattersley, the conglomerate's chief executive, didn't mince words about what's driving the deteriorating numbers. 5 President Trump speaks in Washington on Tuesday — weeks after his administration doubled aluminum tariffs, triggering a wave of cost increases for US manufacturers. Getty Images He cited 'higher-than-expected indirect tariff impacts' on aluminum pricing as a key factor hammering the company's bottom line, particularly through what's known as Midwest Premium pricing for the metal used in beer cans. Advertisement In June, the Trump administration doubled import duties on aluminum from 25% to 50%. Unlike previous trade policies that carved out exemptions for close allies, the new tariff hit virtually everyone, including traditional partners like Canada and Mexico. 5 Coors beer cans lined up on shelves, representing millions of units now subject to higher material costs under new trade rules. REUTERS The policy change has sent aluminum prices soaring, creating a ripple effect that's hitting beverage companies particularly hard. Advertisement Molson Coors, which packages millions of beers in aluminum cans that are sold under brand names such as Coors Light, Miller Lite and Blue Moon, is seeing its margins squeezed by the price hikes. The brewing giant can either absorb the higher expenses, cutting into profits, or pass them along to consumers who are already pulling back from beer purchases. For now, the company appears to be absorbing much of the aluminum cost increase rather than immediately passing it through to consumers, which explains the pressure on profit margins reflected in the latest outlook cuts. 5 Workers at a Canadian aluminum plant in Hamilton, Ontario, one of many suppliers hit hard by expanded US tariffs on key imports. AFP via Getty Images Advertisement Beer sales, meanwhile, continue their stubborn decline across key markets, with US volumes — the number of units sold — dropping more than 5% in the second quarter alone. The company is steadily losing market share as Americans increasingly turn to alternatives like hard seltzers, craft cocktails and non-alcoholic options. The overseas picture isn't much brighter. In Europe, the Middle East, Africa and Asia-Pacific regions, volumes fell nearly 8% as soft demand collided with intensifying competition. Total volumes in Western Hemisphere markets dropped 6.6% during the quarter, reflecting broad weakness across the beer category. Bank of America recently downgraded Molson Coors, warning about structural headwinds facing the entire beer industry and predicting US beer volumes could fall 4% this year. 5 Aluminum ingots are stacked in Hamilton, Ontario, where rising metal prices are squeezing beverage producers like Molson Coors. Getty Images The latest guidance cut was deeper than most analysts expected, painting what one described as a 'bleak' picture for the remainder of 2025. The aluminum tariff impact represents a particularly frustrating challenge for beer companies because it's largely beyond their control. Unlike demand fluctuations or competitive pressures, tariffs create an immediate cost increase that companies must somehow manage without obvious alternatives. Advertisement US aluminum prices have surged since the tariff increases took effect, with the price gap between American and European aluminum widening by 139%. 5 Miller Lite cans on a production line, with aluminum costs eating into margins across the beer category. AP Companies throughout the supply chain are grappling with higher input costs, from beverage makers to food producers to automakers. The stated goal of the tariffs is to support domestic aluminum production and reduce dependence on foreign suppliers. Advertisement Plants like Century Aluminum have endorsed the policy as essential for keeping US smelters operational. However, boosting domestic capacity takes time, leaving companies like Molson Coors caught in the middle of a trade policy transition. Molson Coors is trying to offset these mounting pressures through several strategies, including a focus on premium brands such as Madri and pursuing partnerships with firms such as Fever-Tree to diversify its portfolio.
Yahoo
6 days ago
- Business
- Yahoo
Molson Coors Cuts Outlook, CEO Calls Beer Market Slump 'Cyclical'
Molson Coors Beverage Company (NYSE:TAP) reported second-quarter results on Tuesday, with adjusted earnings per share of $2.05, beating the analyst consensus estimate of $1.86. Quarterly sales of $3.201 billion beat the Street view of $3.121 billion. Net sales decreased 1.6% reported and 2.6% in constant currency. Brand volumes decreased 5.1%, including a 4.0% decrease in the Americas as well as a 7.8% decrease in EMEA & sales in Americas fell 2.8% year over year to $2.504 billion, EMEA & APAC gained 3% to $703.9 million. The company said its second-quarter results were weighed down by weak macroeconomic conditions in the beer market and softer U.S. market share, which hurt volume leverage, and by expected headwinds from ending its Americas contract brewing agreements at the end of 2024. View more earnings on TAP Underlying (Non-GAAP) EBITDA in the quarter under review increased to $763.9 million, compared with $750.1 million a year ago. 'We continue to view the incremental softness in the industry performance this year as cyclical, and we continue to believe in Molson Coors' ability to achieve its long-term growth objectives,' said CEO Gavin Hattersley. Total debt as of June 30 was $6,319.3 million, and cash and equivalents totaled $613.8 million. Outlook Molson Coors Beverage projects fiscal 2025 adjusted EPS of $5.36–$5.54, below the $5.96 consensus, and anticipates sales of $11.162–$11.278 billion versus $11.386 billion expected. 'As a result of the anticipated ongoing macroeconomic impacts on the industry, our lower-than-expected U.S. share performance, and higher-than-expected indirect tariff impacts on the pricing of aluminum, in particular the Midwest Premium pricing, we have adjusted our 2025 full-year top and bottom-line guidance. However, we are reaffirming our annual underlying free cash flow guidance of $1.3 billion plus or minus 10% due to expected higher cash tax benefits and favorable working capital,' Hattersley added. TAP stock has rebounded, now up almost 2%, recovering from earlier losses that followed the company's forecast of a 3-4% drop in 2025 net sales. Price Action: TAP shares are trading higher by 1.73% to $49.45 at last check Tuesday. Read Next:Image via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? MOLSON COORS BEVERAGE (TAP): Free Stock Analysis Report This article Molson Coors Cuts Outlook, CEO Calls Beer Market Slump 'Cyclical' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Molson Coors lowers sales, profit forecasts again
Molson Coors Beverage Co. has again cut forecasts for closely-watched sales and earnings metrics as volumes in EMEA and APAC missed Wall Street expectations. The Madri brewer said today (6 August) it now expects its net sales to fall by 3-4% on a constant-currency basis in 2025. In May, when Molson Coors last lowered its guidance, it forecasts a 'low single-digit decline'. The US giant issued new projections for its underlying income before income taxes and underlying diluted earnings per share. The Staropramen owner sees its underlying income before income taxes decrease 12-15% this year, once exchange rates are removed from calculations. It had forecast a 'low single-digit' fall. Molson Coors expects its underlying diluted EPS to be 7-10% lower in 2025, again compared to a low single-digit decline it had previously projected. 'As a result of the anticipated ongoing macroeconomic impacts on the industry, our lower-than-expected US share performance, and higher-than-expected indirect tariff impacts on the pricing of aluminum, in particular the Midwest Premium pricing, we have adjusted our 2025 full year top and bottom-line guidance,' president and CEO Gavin Hattersley said. The new guidance came alongside Molson Coors' second-quarter results, which included lower net sales, volumes and operating income – although net income grew slightly. The volumes from Molson Coors' combined EMEA and APAC division came in below Wall Street expectations, falling 7.8%. The company pointed to 'soft market demand and a heightened competitive landscape'. In the Americas, Molson Coors' volumes dropped 6.6% in the second quarter amid lower brand volumes in the US and the end of a contract brewing deal. The decline was better than analysts had forecast. 'We continue to view the incremental softness in the industry performance this year as cyclical, and we continue to believe in Molson Coors' ability to achieve its long-term growth objectives,' Hattersley added. 'That said, our second-quarter financial results were impacted by the macroeconomic environment and its broad effects on the beer industry and consumer, our softer US share performance, as well as the resulting impact of volume deleverage.' Hattersley plans to leave the US beer major by the end the year, the group said in a statement on 14 April. He has headed the Aspall cider brewer since 2019. 'Collectively, we have held most of the share gains over the last three years for our core US power brands – Coors Light, Miller Lite, and Coors Banquet. We remain committed to our premiumisation plans: in EMEA and APAC behind the strength of Madri, in Canada with continued growth in Miller Lite and our flavour portfolio, and in the US with Peroni and our partnership with Fever-Tree as well as continued focus against Blue Moon,' he said. In the second quarter to 30 June, Molson Coors' net sales fell 1.6% to $3.2bn, or by 2.6% on a constant-currency basis. Financial volume – which represents Molson Coors' owned or 'actively managed' brands – fell 7%. Operating income decreased 2.7% to $583.6m. Net income attributable to Molson Coors grew 0.2% to $428.7m. Bernstein analyst Nadine Sarwat said: 'Molson Coors' Q2 print beat estimates, led by the US. Looking through the noise of lost US contract brewing and favourable US shipment timing, one number stands out: US brand volumes growth of 'just' -5.3%, better than Nielsen-tracked channels of -7.2% for the same period. 'Yet the rest of the release makes for grim reading. 2025 guidance was cut, which was expected given consensus levels today. Yet the cut has gone below consensus expectations.' "Molson Coors lowers sales, profit forecasts again" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
