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Molson Coors Beverage Co Shs -B- Non-Voting TAP

Morningstar Rating
$61.94 −0.51 (0.82%)
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Company Report

Molson Coors Earnings: Good Process on Efficiency Gains but Lack of Premium Brands Still a Handicap

We don’t plan any material changes to our $70 fair value estimate for no-moat brewer Molson Coors after digesting its 2023 results, as sales growth of 9.4% and adjusted EPS of $5.43 edged our estimates of 9% and $5.34, respectively. While we give management credit for swift measures in 2023 to boost North America volume expansion as controversies affected main rival wide-moat Anheuser-Busch, in addition to steady efficiency gains in the past few years, we remain unenthused about the firm’s long-term outlook. This is given its reliance on commoditized midrange and economy beer segments and a lack of premium brands to capitalize on the consumption upgrade trends. As such, our 10-year projections for low-single-digit sales growth and low-teens average operating margins remain in place.

Price vs Fair Value

TAP is trading at a 11% discount.
Price
$62.47
Fair Value
$44.00
Uncertainty
Medium
1-Star Price
$54.20
5-Star Price
$56.00
Economic Moat
Crsh
Capital Allocation
Wjhpkgyz

Bulls Say, Bears Say

Bulls

Strategic initiatives to expand its exposure to the premium aisle and unearth cost savings should lead to margin improvement longer term.

Bears

High volume concentration in the secularly-challenged midrange and economy beer segments does not bode well for top-line and profit growth.

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News

Trading Information

Previous Close Price
$62.45
Day Range
$61.5962.26
52-Week Range
$49.3270.86
Bid/Ask
$61.91 / $61.99
Market Cap
$13.17 Bil
Volume/Avg
231,807 / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
11.09
Price/Sales
1.14
Dividend Yield (Trailing)
2.63%
Dividend Yield (Forward)
2.63%
Total Yield
4.17%

Company Profile

Molson Coors owns well-known beer brands including Miller, Coors, Blue Moon, and Carling, and ranks as the second-largest beer maker in both value and volume terms in the U.S., Canada, and the United Kingdom. Through licensing agreements, the firm also brews and distributes beer and hard seltzer under partner brands from Heineken, Anheuser-Busch InBev, Asahi, and Coca-Cola. The brewer uses independent distributors in the U.S. given the three-tier distribution requirements, while using a combination of distributors and an in-house sales team in Canada and Europe. North America remains its largest market, contributing over 80% of total revenue.
Sector
Consumer Defensive
Industry
Beverages - Brewers
Stock Style Box
Mid Value
Total Number of Employees
16,500

Competitors

Valuation

Metric
TAP
STZ
ABI
Price/Earnings (Normalized)
11.0920.6917.66
Price/Book Value
0.994.701.61
Price/Sales
1.144.712.13
Price/Cash Flow
6.6815.298.68
Price/Earnings
TAP
STZ
ABI

Financial Strength

Metric
TAP
STZ
ABI
Quick Ratio
0.430.290.43
Current Ratio
0.701.050.64
Interest Coverage
6.245.413.13
Quick Ratio
TAP
STZ
ABI

Profitability

Metric
TAP
STZ
ABI
Return on Assets (Normalized)
4.49%8.76%
Return on Equity (Normalized)
9.09%24.52%
Return on Invested Capital (Normalized)
6.81%11.84%
Return on Assets
TAP
STZ
ABI
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Beverages - Brewers Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
FMX
Fomento Economico Mexicano SAB de CV ADRDwgvy
BUDFF
Anheuser-Busch InBev SA/NVCgmmjcv$125.5 Bil
BUD
Anheuser-Busch InBev SA/NV ADRQwj$125.5 Bil
HINKF
Heineken NVKxhmgq$53.7 Bil
HEINY
Heineken NV ADRGwkrlkq$53.7 Bil
ABEV
Ambev SA ADRLwpw$41.2 Bil
HKHHF
Heineken Holding NVNrc$22.8 Bil
CABGY
Carlsberg A/S ADRLjlvz$20.0 Bil
SAM
Boston Beer Co Inc Class APxfll$4.2 Bil

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