Boston Beer (SAM) shares fell after Cowen analysts reaffirmed an underperform rating, citing the brewer’s move to withdraw forecast due to slowing hard seltzer sales.
Boston Beer has a $400 price target, according to Cowen.
According to the investment business, revenue trends are continuing to deteriorate. Its earlier forecasts for full-year earnings per share at the low end of the range were probably too optimistic.
“While the company’s market-leading position in hard seltzer has been transformative for its growth prospects,” analyst Vivien Azer wrote, “a category slowdown, tough upcoming [comparisons] and increased competition leave us cautious on SAM’s valuation in the face of potential downward estimate revisions.”
At the time of writing, Boston Beer stock was down 8.8% to $510 a share. Inventory write-offs and shortfall fees for third-party distributors are expected to provide cost headwinds for Boston Beer, according to the company’s management.
Boston Beer retracted its full-year forecast on Wednesday, citing continued deterioration in the hard-seltzer market as a reason for write-offs and other expenditures.
The firm now expects diluted earnings to fall below its earlier forecast of $18 to $22 per share for the full year. The demand for hard seltzer drinks has declined in recent years.
According to industry sources, full-year 2021 hard-seltzer retail sales will be 100 million cases lower than those forecast in May 2021 and more than 30 million lower than those forecast in July 2021, according to Boston Beer.
Bevy Long Drink, a new refreshing beverage inspired by Finland’s national cocktail, the “Long Drink,” was launched by the Boston Beer Company on Wednesday. In early November, Bevy Long Drink will be available in two flavors: Sparkling Citrus Refresher and Sparkling Berry Refresher.
Bevy’s new sparkling citrus refresher is crafted with a delectable and easy-to-drink combination of citrus tastes and wild juniper berries for a thirst-quenching beverage fit for any occasion. The original varieties of Bevy Long Drink are sweet, tangy, delightfully flavorful, and 5.8% ABV.