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

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No-Moat Molson Coors Brews Up Stable Results Despite Supply Chain Disruption; Shares Undervalued

Jaime M. Katz, CFA Senior Equity Analyst

Analyst Note

| Jaime M. Katz, CFA |

No-moat Molson Coors released solid results for its third quarter, tracking largely in line with our full-year estimates for both revenue and gross margin. Given that our growth forecast for sales of 6% and EBITDA of 1% are within management’s reiterated outlook for a mid-single-digit sales increase and flat EBITDA growth, we do not plan to make any material changes to our $64 fair value estimate, outside of a slight adjustment to account for time value. Shares trade at a more than 30% discount to our fair value estimate, and we view the current price as an attractive entry point given the stabilization of the business.

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Company Profile

Business Description

Molson Coors is the fifth- largest beer producer globally, boasting top-two positioning in the U.S., Canada, and many Central European markets. It brews and markets a slew of company-owned brands including Blue Moon, Coors, Miller, Vizzy, and Staropramen. It also sells various partner brands in certain locales such as Topo Chico (licensed from Coca-Cola), Amstel and Dos Equis in Canada (through an exclusive import/license arrangement with Heineken), and Corona in Central Europe (through an agreement with Anheuser-Busch InBev). The firm's go-to-market approach differs by geography as well, primarily using independent distributors in the U.S., but deploying hybrid models in Canada and Europe.

Contact
NH353, P.O. Box 4030
Golden, CO, 80401
T +1 303 279-6565
Sector Consumer Defensive
Industry Beverages - Brewers
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 17,000

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