Molson Coors' Stock Price Bubbles Up, But Boston Beer Fizzles Ahead of Earnings
Molson Coors
Beer sales are rising with the summer heat, but investors chose to quench their thirst Tuesday with shares of beer giant Molson Coors (TAP) - Get Report while giving a cold shoulder to craft brewer Boston Beer Co. (SAM) - Get Report .
Molson Coors jumped 3.8% to $56.30 as investors continued to soak up news that the global brewer plans to hike its dividend payments. TAP recently announced plans to boost its quarterly dividend to 57 cents a share for stockholders of record as of Aug. 20. That represents a 39% increase from Molson Coor's previous 41-cent-per-share payout.
The dividend hike comes as the beer giant pushes ahead with plans to reduce debt and cut costs by closing underperforming breweries and other measures, with as much $205 million in savings pegged for 2019, according to Zacks Investment Research. "TAP is focused on boosting investors' sentiments through several growth initiatives and shareholder-friendly moves," Zacks wrote in a recent note.
Still, Molson Coors faces a tough and highly competitive market, with shifts in consumer tastes that have punished the big brewers while rewarding smaller craft-beer makers.
Analysts at JPMorgan have a neutral rating on the stock, noting that Molson Coors' U.S. sales fell 2.2% over the past month even as the broader beer, flavored-malt-beverage and cider market saw a 2.7% increase.
Meanwhile, shares of Boston Beer Co. fell 2% to $385.80 Tuesday amid downbeat forecasts for its quarterly earnings report due out Thursday.
Analysts surveyed by Zacks predict the company, best known for its Sam Adams beer, will only earn $1.83 a share. That would represent a 7.6% decline from the same period a year ago.
On the plus side, analysts surveyed by Zacks expect Boston Beer's revenue to rise 13.2% year over year to $309.2 million for the latest quarter.