Needham analyst Gerald Pascarelli has reiterated their neutral stance on SAM stock, giving a Hold rating today.
Gerald Pascarelli has given his Hold rating due to a combination of factors that reflect both positive and negative aspects of Boston Beer’s recent performance. The company ended the year on a strong note with better-than-expected shipments, depletions, revenue, and margins. However, these positives were counterbalanced by increased advertising, general and administrative, and non-operating expenses, which led to a miss in the fourth-quarter earnings.
Looking ahead, while the outlook for a higher gross margin is promising, achieving the company’s low single-digit revenue growth target will require significant reinvestment of gross profits. This reinvestment is expected to lead to increased advertising and promotion expenses, resulting in a downward revision of earnings per share estimates by analysts. Despite the positive aspects of revenue and gross margin performance, ongoing concerns about the Twisted Tea and Truly brands continue to pose challenges, justifying the Hold rating.
Pascarelli covers the Consumer Defensive sector, focusing on stocks such as Constellation Brands, Celsius Holdings, and Boston Beer. According to TipRanks, Pascarelli has an average return of -2.4% and a 43.94% success rate on recommended stocks.
In another report released today, Citi also maintained a Hold rating on the stock with a $265.00 price target.