Molson Coors Jumps 7% on Q4 Earnings Beat, 2025 Growth Outlook

Molson Coors Beverage (NYSE:TAP) gained over 7% intra-day today after reporting better-than-expected fourth-quarter earnings, despite a slight revenue decline caused by lower shipment volumes and currency headwinds.

For Q4, the brewing giant posted adjusted earnings per share of $1.30, exceeding analyst estimates of $1.13. Revenue reached $2.74 billion, slightly above the $2.71 billion consensus forecast, though net sales declined 2% year-over-year. The dip was primarily attributed to a 6.4% drop in financial volumes, reflecting lower shipments across both segments and weaker contract brewing volumes in the Americas.

Despite these challenges, pricing and sales mix improvements helped offset some of the volume declines, supporting bottom-line growth. Looking ahead, Molson Coors projects low single-digit net sales growth for 2025 on a constant currency basis. The company expects mid single-digit growth in underlying income before income taxes and high single-digit expansion in underlying EPS, reflecting continued cost discipline and strategic execution.

However, management flagged macroeconomic uncertainty, citing potential geopolitical disruptions and evolving global trade policies as risks that are not factored into its current outlook. This includes possible U.S. import tariffs and retaliatory trade measures that could impact costs and international markets.

Molson Coors Beverage Company's Impressive Q1 Earnings

On Tuesday, April 30, 2024, Molson Coors Beverage Company (TAP:NYSE) reported its earnings per share (EPS) at $1.19, which was significantly higher than the anticipated EPS of $0.71. This performance not only showcased the company's ability to exceed expectations but also highlighted its financial strength and operational efficiency. Additionally, TAP reported a revenue of approximately $2.6 billion for the quarter, surpassing the estimated revenue of roughly $2.5 billion. This revenue figure represents a notable increase from the $2.35 billion reported in the same period the previous year, emphasizing the company's growth trajectory and its ability to consistently outperform market expectations. The company's financial results for the first quarter of 2024 were impressive, with a 10.7% increase in net sales and a significant surge in U.S. GAAP income before income taxes by 160.5% to $265.4 million. The underlying (Non-GAAP) income before income taxes also saw a substantial improvement, increasing by 68.8% in constant currency to $258.8 million. These figures underscore Molson Coors' robust financial health and its ability to generate substantial profits, further solidifying its position within the Zacks Beverages - Alcohol industry. Molson Coors' stock experienced a fractional rise in premarket trading following the announcement of these strong financial results. The company's net income nearly tripled, with first-quarter net income escalating to $207.8 million, or 97 cents per share, up from $72.5 million, or 33 cents per share, in the same quarter of the previous year. This remarkable increase in net income, coupled with a revenue jump of 10.7%, surpassed analysts' expectations and marked a significant financial achievement for Molson Coors. Such performance not only reflects the company's operational excellence but also its ability to adapt and thrive in a competitive market. The financial metrics further reveal Molson Coors' solid financial standing and potential for investment. With a price-to-earnings (P/E) ratio of approximately 11.55, the stock appears to be undervalued relative to its earnings, suggesting a potential investment opportunity. The price-to-sales (P/S) ratio of about 1.05 indicates that the stock is trading at a reasonable value in relation to its sales. Additionally, the enterprise value to sales (EV/Sales) ratio of approximately 1.53 and the enterprise value to operating cash flow (EV/OCF) ratio of around 8.70 provide insights into the company's valuation in relation to its sales revenue and operating cash flow, respectively. Despite a moderate level of debt relative to equity, as indicated by the debt-to-equity (D/E) ratio of about 0.47, and potential liquidity challenges suggested by the current ratio of approximately 0.69, Molson Coors' financial performance and growth prospects remain strong. In conclusion, Molson Coors Beverage Company's financial results for the first quarter of 2024 demonstrate its ability to exceed expectations and maintain a trajectory of growth. The company's significant increase in net income, coupled with a robust rise in net sales and underlying income before income taxes, highlights its financial strength and operational efficiency. These results, along with favorable financial metrics, position Molson Coors as a potentially undervalued stock with strong investment appeal, reflecting its solid financial position and positive momentum as it progresses through the year.

Deutsche Bank analysts provided their outlook on Molson Coors Beverage Company (NYSE:TAP) ahead of the company’s Q2/22 earnings results, expected to be reported on Aug 2.

The analysts expect Q2 results to portray strength in the on-premise channel both in the US and Europe, with away-from-home consumption buttressed by conducive weather trends and proving additive to comparatively softer trends in off-premise—noting, however, the company’s beer portfolio share gains and distribution momentum in new offerings such as Topo Chico and Simply.

According to the analysts, the favorable channel mix shift, pricing actions, strength in the company's above premium portfolio, and favorable hedges should all provide meaningful offsets to cost headwinds, operating inefficiencies, and the company's elective marketing reinvestments this quarter.

The analysts increased their price target to $54 from $51, while reiterating their hold rating.

Deutsche Bank analysts provided their outlook on Molson Coors Beverage Company (NYSE:TAP) ahead of the company’s Q2/22 earnings results, expected to be reported on Aug 2.

The analysts expect Q2 results to portray strength in the on-premise channel both in the US and Europe, with away-from-home consumption buttressed by conducive weather trends and proving additive to comparatively softer trends in off-premise—noting, however, the company’s beer portfolio share gains and distribution momentum in new offerings such as Topo Chico and Simply.

According to the analysts, the favorable channel mix shift, pricing actions, strength in the company's above premium portfolio, and favorable hedges should all provide meaningful offsets to cost headwinds, operating inefficiencies, and the company's elective marketing reinvestments this quarter.

The analysts increased their price target to $54 from $51, while reiterating their hold rating.

Analysts at Deutsche Bank provided their outlook on Molson Coors Beverage Company (NYSE:TAP) ahead of the company’s Q4 results, which will be reported on Feb 23.

Similar to Q3, the analysts see continued channel normalization toward the on-premise across the company's end-markets, incremental pricing and premiumization efforts, and shipment timing tailwinds benefiting the company's top-line.

The analysts generally view the Q4 consensus revenue estimate as reasonable, but don’t see a potential downside to gross margin as input cost pressures, distribution costs, and supply chain bottlenecks continue to lead pricing and productivity offsets.

Despite these challenges and the company's plan to reinvest in marketing ahead of Q4/19 levels, the analysts expect modestly better EBITDA than consensus, as the company strictly manages non-marketing SG&A spend.