Boston Beer (SAM) is the largest craft brewer in the U.S., and the sixth-biggest brewer in the U.S.
Industry analysts have a decidedly conflicting outlook for the company's shares.Morningstar gives the company a two-star rating because it believes shares are overvalued at current prices ($87 recently), and it puts a fair value price of $75 on them. "Although we continue to admire the strength of the Sam Adams brand, we recommend investors look elsewhere for value in the brewing industry." Morningstar analyst Philip Gorham said in a March 9 research note that even after the recent drop in the company's share price, "Boston Beer is still trading at 22 times 2011 (estimated) earnings, a valuation that we think reflects neither the firm's limited scale, which means it does not share the competitive advantages of its much larger peers, nor the looming risks to profitability." Morningstar said its review of analysts' ratings found one "buy," three "holds" and "two" underperform" ratings. But Standard & Poor's gives the company a four-star rating out of a possible five, a "buy" recommendation and a 12-month price target of $97 per share. The ratings firm's analysts said in a March 5 research note that they expect "further volume growth in craft brews as consumers view products as an affordable luxury. Over the short term, we think we may see continued trading down within the beer category from premium brands but believe those trends will reverse in 2011." Shares are down 8% this year but have risen 75% over the past year. Its shares have an impressive five-year average annual return of 26%. It has a market value of $1.2 billion.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV