On Thursday, HSBC initiated coverage on Molson Coors Beverage Company (NYSE:TAP) with a Hold rating and a price target of $68. Shares of the company gained nearly 3% in Thursday’s trading session. Analyst Carlos Laboy cited concerns about the beer company’s underexposure in high-growth segments. According to Laboy, Molson Coors is not seeing the same international strength as its rival, Anheuser-Busch InBev (NYSE:BUD).
Meanwhile, Laboy noted a continued decline in the U.S. mainstream-priced beer segment. “Sustaining long-term brand pricing power for Coors Light and Miller Lite in a declining category will likely be difficult,” the analyst added.
However, he mentioned that if Molson Coors meets its stated goal of pricing in line with inflation, it may achieve its planned low-single-digit sales increase. HSBC projects five-year CAGRs of 1.3% for sales and 5.3% for earnings per share for Molson Coors.
What is the Target Price for Tap Stock?
Overall, analysts have a Hold consensus rating on TAP stock based on two Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 26.76% increase in its share price this year, the average TAP price target of $66.07 per share implies 7.62% upside potential.
