Susquehanna Issues a Hold Rating on Boston Beer

By Jason Carr

In a report released today, Pablo Zuanic from Susquehanna assigned a Hold rating to Boston Beer (NYSE: SAM), with a price target of $183. The company’s shares closed on Friday at $176.40, close to its 52-week high of $181.20.

Zuanic commented:

“SAM shares have pretty much recovered the 7% loss post the 3Q print and conference call (the stock is up 35% since its late-July trough), mainly we think on the assumption hard seltzer will maintain its robust growth, optimistic expectations about the coming new major launches (Sam’76 and New England IPA), and the notion that continued 100bp of gross margin expansion will flow through to the EBIT line. At current levels SAM ex cash trades at 25x 2018 EPS, which seems pricey for a company guiding for low-single- digit depletion growth in 2018 after an expected drop of 4-7% this year (we estimate in 3Q ex hard tea and ex hard seltzer, the remaining 70% of the portfolio fell 20% on a combined basis). Due to our more cautious read of industry trends (for independent national craft beer players) and a different take on the outlook for key parts of the SAM portfolio (which make us assume “below-normal” EBIT margins for 2018-19), plus doubts about a company sale in the near term (under a dual-class share structure, founder Jim Koch controls the company), we are hard pressed to expect a P/E rerating of SAM (and true adjusted underlying EPS growth is only about 7%). With the upside apparently limited, we prefer to rate the stock Neutral. Our new December ’18 price target is $183 (see appendix). For our most recent take on industry trends see our note Craft Beer Update (Tidbits from Bart Watson Lunch). .”

According to, Zuanic is a 3-star analyst with an average return of 2.1% and a 54.5% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Constellation Brands Inc, Anheuser-Busch Inbev Sa, and Craft Brewers Alliance.

Boston Beer has an analyst consensus of Moderate Sell, with a price target consensus of $153.

The company has a one-year high of $181.20 and a one-year low of $128.70. Currently, Boston Beer has an average volume of 158.4K.

Based on the recent corporate insider activity of 59 insiders, corporate insider sentiment is negative on the stock.

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Boston Beer Co., Inc. engages in the business of alcoholic beverages. It operates through Boston Beer Company, and A&S Brewing Collaborative segments. The Boston Beer Company segment comprises of Samuel Adams, twisted tea, angry orchard, and truly spiked and sparkling brands.