Guggenheim analyst raised Boston Beer’s price target to a ‘Street High’ of $1,142 (30.4% upside potential) from $977, amid expectations that the planned launch of Truly Iced Tea Hard Seltzer will boost the company’s Truly franchise growth in fiscal 2021.
Guggenheim analyst Laurent Grandet maintained a Buy rating on Boston Beer’s (SAM) stock. In a note to investors, Grandet wrote, “We continue to think there is plenty of room for new innovations to expand the broader hard seltzer segment, and, net, we think the introduction of the new hard tea lineup could be roughly 75% incremental to the Truly franchise and add ~25pts of brand-family retail growth in 2021.”
Grandet raised his earnings estimates for fiscals 2021 and 2022. The analyst now forecast EPS of $22.11 for fiscal 2021, up from previous estimates of $21.60. For fiscal 2022, Grandet raised EPS estimates to $34.62 from $29.70. (See SAM stock analysis on TipRanks).
On July 23, Boston Beer reported a 42% year-over-year jump in its 2Q sales mainly due to a 35.3% surge in shipments. The company also noted that depletions grew 46% during the quarterly primarily driven by strength in Truly Hard Seltzer and Twisted Tea brands.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys, 3 Holds, and 1 Sell. Following the stock’s 132% year-to-date rally, the average price target of $829.82 now implies downside potential of 5.3%.
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