How Will Molson Coors Brewing (TAP) Stock Be Affected By This Analyst Action?

NEW YORK (TheStreet) -- Molson Coors Brewing (TAP) shares were downgraded to "neutral" from "buy" by analysts at BTIG Research who believe that there are better beverage options.

Analysts at the firm made their valuation call after forecasting a CEO transition coming for the company in the near term, and rumored mergers and acquisitions failing to come to fruition.

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In separate news, Czech brewing company Heineken  (HEINY) is reportedly in talks with Molson Coors to sell its Czech operations to the Colorado-based company, according to two unnamed sources who talked to the Czech daily newspaper Lidove Noviny.

"The talks are already a reality even if it is not certain how they will turn out," the newspaper quoted one of the sources.

The brewing company shares are flat in pre-market trading on Tuesday.

TheStreet Ratings team rates MOLSON COORS BREWING CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MOLSON COORS BREWING CO (TAP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 46.50% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TAP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MOLSON COORS BREWING CO has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MOLSON COORS BREWING CO increased its bottom line by earning $2.96 versus $2.43 in the prior year. This year, the market expects an improvement in earnings ($4.37 versus $2.96).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Beverages industry average. The net income increased by 8.8% when compared to the same quarter one year prior, going from $267.30 million to $290.90 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • You can view the full analysis from the report here: TAP Ratings Report

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