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Cowen analyst Vivien Azer told investors in a research note Friday that the firm is becoming more positive on Molson Coors Beverage Company (NYSE:TAP) as its “top line is the best it’s been in years.”
The Cowen analyst currently has a Market Perform rating and a $55 price target on Molson shares.
“A softening consumer backdrop keeps us on the sidelines, but we see an opportunity to get more constructive if 1) price elasticities hold up, 2) TAP is able to capture consumer down-trading, 3) TAP can continue to drive positive growth in the slowing FMB category, and 4) inflation pressure on margins remains manageable,” wrote Azer.
Four straight quarters of top-line growth is the best we have seen in many years, said the analyst, stating that the company’s strategic plan looks to be working.
“The U.S. turnaround is starting to shine through as TAP exits the 12-month overhang from de-prioritizing economy offerings, which better aligns TAP’s beer portfolio with the category,” Azer said. “We’re seeing success in the premium lights segment for Coors Light and Miller Lite (which have been a challenge to grow simultaneously). Coupled with growth in the hard seltzer (despite category declines), we think the company is reasonably well positioned to hit its guidance for mid-single-digit revenue growth this year, driven by the U.S.”
Molson Coors shares jumped 3.85% Friday.
