UPDATE: Citigroup Initiates Craft Brew Alliance at Neutral on Competition, Pricing Concerns

Citigroup initiated coverage on Craft Brew Alliance BREW with a Neutral rating and a $7 price target. Citigroup noted, "BREW offers the most concentrated exposure to the craft beer category. However, the company is facing stiff competition, and continues to evolve its pricing and positioning strategy. And while opportunities for operating margin expansion clearly exist, we worry that higher levels of investment may still be needed. With the shares trading at a rich 30.6x our CY14 EPS estimate, we have a $7 target price on the stock." Craft Brew Alliance closed at $6.59 on Wednesday.