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Molson Coors (TAP)
NYSE:TAP
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Molson Coors
(NYSE:TAP)
74Outperform
Positive Factors
Financial Performance
TAP reported results that were better than expected on both the top and bottom lines, reflecting volume leverage, favorable pricing, and lower tax.
Guidance and Expectations
2025 guidance is well above Street expectations, indicating strong future performance.
Strategy and Innovation
TAP's progress on its transformation journey is encouraging as it advances its strategy to premiumize and diversify its portfolio beyond beer while strengthening its core power brands.
Negative Factors
Market Challenges
The management acknowledged unexpected deceleration in the EMEA & APAC regions, indicating challenges in returning to normal growth patterns.
Segment Exposure
The company has significant exposure to the weakest segment within the beer category, making it difficult to grow its U.S. top line.
Volume Decline
Despite efforts to diversify the portfolio, the company is expected to face another year of declining volumes.
Molson Coors (TAP) vs. S&P 500 (SPY)
Market Cap
$11.94B
Dividend Yield3.04%
Average Volume (3M)2.79M
Price to Earnings (P/E)11.0
Beta (1Y)0.33
Revenue Growth-0.64%
EPS Growth22.45%
CountryUS
Employees16,800
SectorConsumer Defensive
Sector Strength67
IndustryBeverages - Alcoholic
Share Statistics
EPS (TTM)5.35
Shares Outstanding190,157,970
10 Day Avg. Volume2,975,357
30 Day Avg. Volume2,793,403
Financial Highlights & Ratios
PEG Ratio0.49
Price to Book (P/B)N/A
Price to Sales (P/S)1.03
Price to Cash Flow (P/CF)6.00
P/FCF Ratio6.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$65.47Price Target Upside11.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Molson Coors Business Overview & Revenue Model
Company DescriptionMolson Coors Beverage Co. is a holding company, which engages in the provision of beer. It operates through the following segments: United States, Canada, Europe, International, and Corporate. The United States segment consists of production, marketing and sales of its brands, and other owned and licensed brands in the United States. The Canada segment includes production, marketing and sales of its brands, and other owned and licensed brands in Canada. The Europe segment comprises of production, marketing and sales of its brands as well as a number of regional brands in the United Kingdom, Republic of Ireland, and Central Europe. The International segment focuses its operations on Latin America, Europe, Asia Pacific, and Africa. The Corporate segment represents interest and certain other general and administrative costs that are not allocated to any of the operating segments. It operates under the brands Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite, taropramen, Carling, Molson Canadian, Creemore Springs, Cobra, Doom Bar, Henry's Hard and Leinenkugel's. The company was founded in 1786 and is headquartered in Denver, CO.
How the Company Makes MoneyMolson Coors makes money primarily through the production, marketing, and sale of beer and other alcoholic beverages. Its key revenue streams include the sale of its well-known brands across various markets, including North America and Europe. The company also engages in strategic partnerships and distribution agreements to expand its market reach and enhance its product offerings. Additionally, Molson Coors invests in marketing and brand-building efforts to maintain and grow its customer base. Revenue is further augmented by its focus on innovation and the introduction of new products that cater to changing consumer tastes and preferences.
Molson Coors Financial Statement Overview
Summary
Molson Coors demonstrates solid profitability and a stable balance sheet. While revenue growth has been a challenge, the company's ability to maintain strong margins and generate cash flow is a positive indicator of financial health. The moderate leverage and solid equity base provide a stable foundation for future growth.Income Statement
Molson Coors has shown a steady improvement in profitability with a gross profit margin of 39.0% and a net profit margin of 9.7% in 2024. The EBIT margin is robust at 15.1%. However, revenue slightly declined by 0.6% compared to the previous year, indicating a need to stabilize top-line growth.72
Positive
Balance Sheet
The company maintains a prudent financial structure with a debt-to-equity ratio of 0.47, reflecting moderate leverage. The return on equity stands at 8.6%, which is reasonable but could be improved. The equity ratio is stable at 50.2%, indicating a balanced capital structure.65
Positive
Cash Flow
The cash flow statement highlights strong free cash flow generation, despite a decline in free cash flow growth of -12.2% from the previous year. The operating cash flow to net income ratio is healthy at 1.7, indicating effective cash generation relative to net income.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 10.58B | 11.63B | 11.70B | 10.70B | 10.28B | 9.65B |
| Gross Profit | |||||
| 3.80B | 4.53B | 4.37B | 3.66B | 4.05B | 3.77B |
| EBIT | |||||
| 1.04B | 1.75B | 1.44B | 1.84B | 1.45B | 1.37B |
| EBITDA | |||||
| 1.83B | 1.75B | 2.16B | 1.81B | 2.29B | 564.00M |
| Net Income Common Stockholders | |||||
| 731.80M | 1.12B | 948.90M | -186.50M | 1.01B | -945.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 969.30M | 969.30M | 868.90M | 600.00M | 637.40M | 770.10M |
| Total Assets | |||||
| 26.06B | 26.06B | 26.38B | 25.87B | 27.62B | 27.33B |
| Total Debt | |||||
| 6.19B | 6.19B | 6.27B | 6.56B | 7.16B | 8.28B |
| Net Debt | |||||
| 5.22B | 5.22B | 5.40B | 5.96B | 6.52B | 7.51B |
| Total Liabilities | |||||
| 12.61B | 12.61B | 12.94B | 12.95B | 13.95B | 14.71B |
| Stockholders Equity | |||||
| 13.09B | 13.09B | 13.20B | 12.69B | 13.42B | 12.37B |
| Cash Flow | Free Cash Flow | ||||
| 792.40M | 1.24B | 1.41B | 840.60M | 1.05B | 1.12B |
| Operating Cash Flow | |||||
| 1.49B | 1.91B | 2.08B | 1.50B | 1.57B | 1.70B |
| Investing Cash Flow | |||||
| -679.30M | -648.00M | -841.70M | -625.10M | -509.90M | -413.60M |
| Financing Cash Flow | |||||
| -1.64B | -1.14B | -981.40M | -889.50M | -1.17B | -1.07B |
Molson Coors Technical Analysis
Neutral
58.89
Price Trends
57.13
Positive
57.80
Positive
55.09
Positive
Market Momentum
0.31
Positive
49.40
Neutral
15.90
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TAP, the sentiment is Neutral. The current price of 58.89 is below the 20-day moving average (MA) of 60.13, above the 50-day MA of 57.13, and above the 200-day MA of 55.09, indicating a neutral trend. The MACD of 0.31 indicates Positive momentum. The RSI at 49.40 is Neutral, neither overbought nor oversold. The STOCH value of 15.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TAP.
Molson Coors Risk Analysis
Molson Coors disclosed 39 risk factors in its most recent earnings report. Molson Coors reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Molson Coors Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $47.71B | 44.41 | 4.99% | 1.74% | -1.73% | -57.46% | |
75 Outperform | $2.76B | 16.62 | 11.55% | 1.66% | 0.15% | 35.56% | |
74 Outperform | $11.94B | 11.01 | 8.54% | 3.04% | -0.64% | 22.45% | |
74 Outperform | $125.46B | 21.48 | 7.31% | 1.03% | 0.64% | 10.02% | |
62 Neutral | $20.48B | 13.68 | -10.76% | 7.35% | 1.61% | 5.91% | |
61 Neutral | $2.56B | 46.23 | 5.99% | ― | 0.21% | -20.69% | |
61 Neutral | $32.06B | 47.50 | 7.94% | 2.28% | 3.69% | -55.78% |
* Consumer Defensive Sector Average
Performance Comparison
TAP
Molson Coors
58.89
-6.69
-10.20%
BUD
Anheuser-Busch Inbev Sa
62.78
3.65
6.17%
SAM
Boston Beer
227.96
-82.17
-26.50%
CCU
Compania Cervecerias Unidas SA
15.34
3.81
33.04%
STZ
Constellation Brands
177.42
-88.10
-33.18%
HEINY
Heineken
41.93
-4.27
-9.24%
Molson Coors Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 11.03% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with solid strategic progress in premiumization and cash generation offset by declines in net sales revenue and volume challenges, particularly in the U.S. and EMEA regions. The company is optimistic about 2025, leveraging its premiumization strategy and operational efficiencies.Highlights
Strong Cash Generation
Delivered over $1.2 billion in underlying free cash flow, enabling $1 billion return to shareholders through dividends and share repurchases.
Premiumization and Growth in Canada
Achieved growth across all price segments in Canada, with Coors Light remaining the top light beer and Miller Light driving above-premium growth.
Share Retention and Shelf Space Gains
Retained over 80% of U.S. core power brands' volume share gains and earned unprecedented shelf space for core brands.
Margin Expansion
Achieved nearly 80 basis points in underlying pretax income margin expansion, driven by pricing, mix, and cost savings.
Lowlights
Consolidated Net Sales Revenue Decline
Net sales revenue decreased by 1.9% in Q4 with a 0.6% decline for the full year.
U.S. Volume Challenges
U.S. brand volume was down 3% in Q4, impacted by the exit of Pabst contract brewing, leading to a 6.7% decline in financial volume.
Competitive Pressure in EMEA and APAC
Faced heightened competitive landscape in the UK and softer industry in Central and Eastern Europe, affecting volumes.
Impact of Contract Brewing Exits
The wind-down of Pabst and Labatt contracts expected to contribute to a 1.9 million hectoliter headwind in 2025.
Company Guidance
During the Molson Coors Beverage Company earnings call for the fourth quarter and fiscal year 2024, guidance for 2025 was issued, aligning with their long-term growth algorithm. Key metrics included a low single-digit net sales revenue growth and mid-single-digit underlying pretax income growth on a constant currency basis, alongside high single-digit underlying earnings per share growth. The company expects to generate underlying free cash flow of approximately $1.3 billion, with an underlying effective tax rate between 22% and 24%. Anticipated capital expenditures are around $750 million, and net interest expense is expected to be approximately $215 million. Molson Coors plans on annual net price increases of 1% to 2% in North America, with premiumization continuing to drive growth. Despite challenges such as a 1.9 million hectoliter headwind from winding down contract brewing volumes, the company expressed confidence in its strategic priorities and a healthy balance sheet to bolster long-term growth and shareholder returns.Molson Coors Corporate Events
Executive/Board Changes
Molson Coors CEO Resignation and Compensation Details
Neutral
Oct 18, 2024
Molson Coors Beverage Company announced the resignation of Sergey Yeskov from his role as CEO of the EMEA&APAC business for personal reasons, effective October 17, 2024. A Termination Agreement includes Yeskov receiving a severance of one year’s salary and other financial arrangements, while being placed on ‘garden leave’ until the end of the year. He also faces non-compete clauses for 12 months post-garden leave.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.