After Deutsche Bank (NYSE:DB) analyst Stephen Powers got done with Molson Coors (NYSE:TAP) and Boston Beer (NYSE:SAM), it’s safe to say they’ll need a cold one for the black eye they took. Powers downgraded both beer brands recently, citing a common cause for both.
Boston Beer was down nearly 6% in today’s trading, while Molson Coors lost just over 3.5%. Both companies took hits on declining seltzer sales, thanks in large part to consumers being pressured by soaring inflation.
For Boston Beer, the seltzer losses were an “aberration.” Deutsche Bank looks for that aberration to clear up in 2023, although the company will still face some troubles, like “consumer belt-tightening” and supply chain issues.
However, analysts have much greater concerns about Molson Coors due to its entire brand strategy. In addition, Deutsche Bank expressed concern about a “…potentially prolonged path to margin upliftment”. That makes Molson Coors potentially much weaker than Boston Beer.
Overall, Wall Street seems equally nonplussed with both brands. Analyst consensus estimates call each a Hold, as both currently trade above their average price targets.