Molson Coors Beverage
stock was higher after an analyst at BofA Securities upgraded shares of the beer maker, noting that it is gaining market share as a result of the boycott of
Anheuser-Busch InBev,
the maker of Bud Light.
Analyst Bryan Spillane raised his rating on Molson Coors (ticker: TAP) to Neutral from Underperform, lifting his target for the stock price to $68 from $54. The stock ended Tuesday 2.1% higher at $65.14, for a gain of 26% this year.
“Our rating change is based on our view that recent U.S. market share gains related to the Bud Light boycott have lasted long enough to positively impact sales and earnings,” Spillane wrote in a research note.
AB InBev (BUD), the maker of Bud Light, started a marketing campaign in April that featured a transgender social media star. Complaints from some conservative consumers led to a boycott of the brand.
AB InBev shares have now fallen 8.8% this year as investors worry that the boycott of Bud Light beers will hurt the company’s earnings. The brewer is expected to release its results on Aug. 3.
With fewer consumers shopping for Bud, more money will be spent on Molson Coors brands, which include drinks like Coors, Keystone, and Miller Lite, Spillane said.
“It’s difficult to determine the duration of the boycott, but it has already lasted longer than industry executives anticipated and appears likely to impact the July 4th holiday,” the analyst said. “TAP appears able to service the demand spike due in part to supply chain improvement (part of the revitalization plan) and learnings from COVID supply chain stress.”
Write to Angela Palumbo at [email protected]
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