In a report released yesterday, Bonnie Herzog from Goldman Sachs maintained a Sell rating on Boston Beer (SAM – Research Report), with a price target of $250.00.
Bonnie Herzog has given her Sell rating due to a combination of factors affecting the Boston Beer Company’s outlook. Despite a stronger-than-anticipated performance in the first quarter, which saw a beat on both revenue and earnings per share due to higher shipment volumes and pricing, Herzog is cautious. The concern stems from one-off benefits that inflated the Q1 results and are not expected to continue, casting doubt on the replicability of this success in future quarters. Additionally, core products like Truly and other beer brands under the SAM umbrella are not performing as well, which raises questions about long-term sustainability and growth.
Furthermore, the management’s reaffirmation of full-year guidance, while prudent, suggests a lack of clear visibility going forward. This ambiguity around Boston Beer’s potential to stabilize its core brands and identify near-term growth catalysts contributes to an unfavorable risk-reward perspective in Herzog’s analysis. Despite the positive aspects of the Q1 report, these underlying challenges lead to the maintenance of the $250 price target and support the Sell rating. The report indicates that the recent successes may not be enough to change the investment thesis for Boston Beer Company.
In another report released on April 15, Deutsche Bank also maintained a Sell rating on the stock with a $264.00 price target.
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Boston Beer (SAM) Company Description:
Boston Beer Co., Inc. engages in the business of alcoholic beverages. Its brands include Samuel Adams, Twisted Tea, Angry Orchard, and Truly Hard Seltzer. The company was founded by C. James Koch in 1984 and is headquartered in Boston, MA.
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