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Boston Beer Co Inc Class A SAM

Morningstar Rating
$304.42 −3.55 (1.15%)
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Company Report

Boston Beer: Cutting Fair Value Estimate and Raising Uncertainty Rating to Very High

We are cutting our fair value estimate for narrow-moat Boston Beer to $350 per share from $497 to incorporate a more cautious sales outlook, mainly due to a more protracted decline in demand for hard seltzer (roughly 30% of total volume in 2023) and lower operating margin. Our fair value estimate implies price/earnings of 32 times on our 2025 earnings estimate and a 2025 enterprise value/EBITDA multiple of 16 times. We are also raising our Morningstar Uncertainty Rating to Very High from High as weak hard seltzer sales trends are likely to cause volatile operating results.

Price vs Fair Value

SAM is trading within a range we consider fairly valued.
Price
$310.13
Fair Value
$373.00
Uncertainty
Very High
1-Star Price
$655.90
5-Star Price
$692.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Boston Beer’s exclusive focus on high-end malt beverages, coupled with its strong innovation pipeline, bodes well for mid-single-digit top-line growth in the coming years.

Bears

The proliferation of products in categories beyond beer has increased the competitive ferocity, driving up customer acquisition and retention costs for Boston Beer.

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News

Trading Information

Previous Close Price
$307.97
Day Range
$303.44309.84
52-Week Range
$287.33395.52
Bid/Ask
$289.18 / $315.56
Market Cap
$3.66 Bil
Volume/Avg
129,605 / 147,396

Key Statistics

Price/Earnings (Normalized)
40.02
Price/Sales
1.86
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
2.54%

Company Profile

Boston Beer is a top player in high-end malt beverages and adjacent categories in the US, with strong positions in craft beer, flavored malt beverages, hard cider, and hard seltzer. The bulk of volume and revenue is concentrated in four brands: Samuel Adams, Angry Orchard, Twisted Tea, and Truly. Beverages are produced using a hybrid model leveraging both in-house capacities and third-party breweries through contract arrangements. While the firm is required to use distributors to reach end markets, including retailers and on-premises operators, it also employs 500 internal sales representatives to educate the market about its products. The firm generates over 95% of sales in the US.
Sector
Consumer Defensive
Industry
Beverages - Brewers
Stock Style Box
Small Core
Total Number of Employees
2,679

Competitors

Valuation

Metric
SAM
TAP
STZ
Price/Earnings (Normalized)
40.0212.3823.08
Price/Book Value
3.421.095.25
Price/Sales
1.861.255.25
Price/Cash Flow
18.647.3117.06
Price/Earnings
SAM
TAP
STZ

Financial Strength

Metric
SAM
TAP
STZ
Quick Ratio
1.640.430.29
Current Ratio
2.250.701.05
Interest Coverage
6.245.41
Quick Ratio
SAM
TAP
STZ

Profitability

Metric
SAM
TAP
STZ
Return on Assets (Normalized)
7.12%4.49%8.76%
Return on Equity (Normalized)
9.57%9.09%24.52%
Return on Invested Capital (Normalized)
8.47%6.81%11.84%
Return on Assets
SAM
TAP
STZ
See how this stock stacks up to its competitors with Morningstar Investor

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