Stifel No Longer Craving Molson Coors, Downgrades To Hold

Some drinkers think Molson Coors Brewing Co Class B (NYSE: TAP) is going flat, and they’re setting it aside for something more flavorful.

The Rating

Stifel Nicolaus analysts Mark Swartzberg, Christopher Sinnott and Ryan Robinson downgraded Molson Coors to Hold and cut their price target from $71 to $65.

The Thesis

Sales volume across the U.S. industry continues to deteriorate, and Stifel anticipates 1.5-percent annual contraction through 2030 as per capita alcohol consumption declines. These factors compound a demographic shift toward wine, spirits and higher-end beer.

“Managers are focused on improved trends across price points, but consumption patterns favor smaller, more premium brands,” the analysts wrote in a Thursday note.

Altogether, conditions render multiple expansion unlikely.

Stifel anticipates flat earnings before interest, taxes, depreciation and amortization with stock appreciation driven only by annual deleveraging.

Price Action

At time of publication, shares were set to open down about 1 percent at a rate of $59.54.

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