In a report released today, Bonnie Herzog from Goldman Sachs maintained a Sell rating on Boston Beer (SAM – Research Report), with a price target of $214.00.
Bonnie Herzog has given her Sell rating due to a combination of factors impacting Boston Beer’s financial performance. The company reported mixed results for the fourth quarter, with a positive topline growth driven by volume but was overshadowed by increased advertising, selling, and general administrative expenses, leading to an earnings per share (EPS) miss. The full-year performance showed shipments and depletions in line with management guidance, but the GAAP EPS fell short of expectations, reflecting ongoing challenges with the Truly brand, despite gains from other products like Twisted Tea and Sun Cruiser.
Additionally, while the gross margin was stronger than anticipated due to revenue and procurement savings, it was negatively affected by shortfall fees and non-cash expenses related to third-party production. The company’s future outlook includes a significant increase in advertising spend to support the national rollout of Sun Cruiser, which is expected to impact adjusted EPS. Given these dynamics, the downside risk to the stock price and the challenges in maintaining growth momentum, Herzog has recommended a Sell rating for Boston Beer.