has more bad times ahead. At least, that’s what analysts at Cowen think, who have downgraded the stock to Market Perform’s Underperform and slashed the target by more than half to $400, from $825.
(ticker: SAM) — creator of Samuel Adams and Truly Hard Seltzer — shocked Wall Street when it said during an earnings call it was overestimating demand for its hard seltzer, prompting many to realize buzz for the drink category was waning. That news alone caused stocks to plunge more than 30% in the past month.
But the Cowen team sees even more downsides to Boston Beer, noting that the broader hard seltzer industry saw a 0.4% drop in sales in the four weeks ending Aug. 14.
“While SAM is gaining more market share than we expected, the category is slowing down more dramatically than we had modeled. We don’t see an on-site recovery as sufficient compensation,” Cowen analyst Vivien Azer wrote in a note Wednesday. She notes that beer and ciders have posted double-digit declines.
Azer sees a loss of more than 30% from consensus expectations for 2022, with its team forecasting full-year earnings of $18.61 per share, while The Street expects $27.35. Azer’s new $400 price target on stocks implies a 21.5 times multiple of its shares, which is still higher than the 10-year low of 18 times and the 20 times average during the company’s “doldrums” in 2015 and 2016 .
Even as the outlook for hard seltzer declines, Boston Beer is still trying to innovate. Earlier this month, it announced a partnership with
(PEP) to develop Hard Mtn Dew, a malt beverage with 5% alcohol by volume.
Shares of Boston Beer fell more than 6% in morning trading, while the S&P 500 was flat.
Write to Carleton English at firstname.lastname@example.org