Will we be referring to this summer as the Summer of the Beer Controversy? After Anheiser-Busch InBev (NYSE:BUD) released a debacle of an ad campaign with the Dylan Mulvaney connection, and Molson Coors (NYSE:TAP) came out with an “empowering” ad that failed to resonate with most of its target market, new beer brands now have a great opportunity. And for Roth MKM, leading the way are Boston Beer (NYSE:SAM) and Constellation Brands (NYSE:STZ).
Roth MKM, via analyst William Kirk, offered up new commentary around Boston Beer and Constellation Brands, known for Sam Adams and Corona, respectively. First, for Boston Beer, Kirk looks not so much for Sam Adams to make big inroads but rather for Boston Beer’s Seltzer and Truly brands to take the lead. Kirk looks for shipments and depletions to the upside of current projections, which is great news for Boston Beer.
Meanwhile, Kirk’s look at Constellation Brands looks for Corona to do great numbers, but right on par with Corona will be the slightly lesser-known brand Modelo Especial. Kirk noted that Premium Light products got the benefit of Bud Light’s losses in April, but seasonal shifts should swing more in Constellation’s favor overall. Given that Memorial Day weekend was full of viral photos of fully-stocked Bud Light displays in grocery stores, it’s clear there’s quite a bit of market share in play yet.
Despite BUD stock’s recent hits, it still represents the best deal out of the four beer stocks mentioned above. It’s rated as a Moderate Buy, but with an average price target of $72, Anheiser-Busch InBev stock offers investors 32.03% potential upside. Meanwhile, Boston Beer may have gained the most, but it’s also the longest shot in the bin. It’s considered a Hold by analyst consensus, and its average price target of $286.75 gives investors 16.02% downside risk to contend with.
