Boston Beer: Hold Rating Amid Structural Industry Pressures and Brand Challenges

Eric Serotta, an analyst from Morgan Stanley, maintained the Hold rating on Boston Beer. The associated price target remains the same with $245.00.

Eric Serotta has given his Hold rating due to a combination of factors affecting Boston Beer. Despite a notable earnings per share (EPS) beat in the third quarter, the company faces ongoing challenges. The gross margin improvement was significant, yet it was counterbalanced by a slight miss in top-line revenue and continued volume weaknesses across its portfolio.
Serotta notes that the alcohol industry is under structural pressure, with demographic shifts, health trends, and cannabis substitution impacting consumption. Additionally, Boston Beer’s heavy reliance on the Twisted Tea brand, which is facing competition from spirits-based ready-to-drink products, poses a risk. The company’s increased reinvestment in brand support and local market initiatives, although significant, has yet to translate into improved top-line performance. These factors contribute to the decision to maintain a Hold rating.

In another report released on October 9, Deutsche Bank also maintained a Hold rating on the stock with a $226.00 price target.

Based on the recent corporate insider activity of 15 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SAM in relation to earlier this year.