Susquehanna Reaffirms Their Hold Rating on Boston Beer (SAM)

By Jason Carr

Susquehanna analyst Pablo Zuanic reiterated a Hold rating on Boston Beer (SAMResearch Report) today and set a price target of $241. The company’s shares closed yesterday at $244.51.

Zuanic observed:

“While we rate the stock Neutral, and realize it is 30% off its July peak of $330, we think risks may be more to the downside than upside through 2/20 with scanner comps eight points tougher for the next two releases (out 1/22 and 2/19). We doubt the company will cut its 2019 volume guidance of “high single digits to low double digits” on the 4Q call on 2/20, but given slowing two-year stacked trends, even the low end of the 2019 target could start to look ambitious. All this in the context of a stock that trades at a 31x ex cash vs. STZ, BUD, and TAP , which trade in the low/mid-teens. In this report we have trimmed estimates due to slowing growth trends. Given the pullback in beer P/E multiples, we now use 25x to value SAM vs. 28x before (plus cash), but recognize a cut in volume guidance could imply a lower P/E multiple. Our CY19 EPS is 10% below consensus.”

According to TipRanks.com, Zuanic is a 4-star analyst with an average return of 3.6% and a 46.2% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners plc, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.

Boston Beer has an analyst consensus of Moderate Buy, with a price target consensus of $291.25, representing a 19.1% upside. In a report released yesterday, Jefferies also reiterated a Hold rating on the stock with a $241 price target.

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Based on Boston Beer’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $38.01 million. In comparison, last year the company had a net profit of $30.53 million.

Based on the recent corporate insider activity of 51 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 segments. The Boston Beer Company segment comprises of Samuel Adams, Twisted Tea, Angry Orchard, and Truly Spiked a& Sparkling brands.