Eric Serotta, an analyst from Morgan Stanley, maintained the Hold rating on Boston Beer (SAM – Research Report). The associated price target is $270.00.
Eric Serotta has given his Hold rating due to a combination of factors impacting Boston Beer. Despite the company reporting better-than-expected depletion rates for the fourth quarter and year-to-date, the overall volume outlook remains challenging. The beer and alcohol industry is facing a tough environment, and Boston Beer’s largest brand, Twisted Tea, is experiencing stagnant or slightly declining sales. Additionally, the Truly hard seltzer line continues to face pressure.
Boston Beer is making strides in improving gross margins, but the anticipated increase in brand reinvestment is expected to limit operating income growth. The company’s guidance for fiscal year 2025 earnings per share is significantly below consensus due to this higher reinvestment. Consequently, Eric Serotta has lowered the price target from $290 to $270, acknowledging the potential for a more appealing risk/return profile following recent stock underperformance.
In another report released on February 21, RBC Capital also maintained a Hold rating on the stock with a $295.00 price target.