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Deutsche Bank analysts downgraded downgrading Boston Beer Co. (NYSE:SAM) to Sell from Hold in a note on consumer staple stocks on Tuesday, raising the price target on the stock to $316 from $315 per share.
They said the firm sees elevated risks to earnings relative to market expectations, slowing top-line/market share momentum, and/or multiple compression vs. peers.
SAM shares are down over 4% so far on Tuesday, adding to its year-to-date losses of well over 20%.
The analysts added that while the firm has few points of criticism with the strategies or recent execution of SAM and other consumer staples the firm downgraded, they “see market expectations as extended (whether in terms of estimates or valuation).”
In addition, the firm sees “rising competitive risks (whether branded or private label) in each case that could challenge investor thinking—particularly as it relates to (i) the pacing of margin recovery relative to top-line growth, and (ii) the cash costs of such growth (given well-placed but ongoing efforts to upgrade capabilities).”
