Citi analyst Filippo Falorni has maintained their neutral stance on SAM stock, giving a Hold rating on February 26.
Filippo Falorni has given his Hold rating due to a combination of factors surrounding Boston Beer’s recent performance and future projections. Falorni notes that the company’s fourth-quarter earnings per share fell significantly short of both Citi’s estimates and the Visible Alpha consensus. This was attributed to lower-than-expected depletion and shipment volumes, as well as weaker gross margins, which were impacted by higher shortfall fees. Furthermore, the company’s initial guidance for fiscal year 2024 suggests a cautious outlook, with expected shipment and depletion rates, as well as earnings per share, that are below the mid-point of market expectations.
Additionally, Boston Beer’s announcement of a CEO transition introduces an element of uncertainty regarding the company’s strategic direction. While incoming CEO Michael Spillane has relevant consumer goods experience, the change in leadership occurs during a challenging period for the company. Despite the potential for innovation and growth in certain product lines, such as Twisted Tea, the overall soft guidance for 2024, combined with a valuation that remains high, limits the immediate upside potential for the stock. Consequently, Falorni’s Hold rating reflects a cautious approach, acknowledging the risks while waiting for clearer signs of sustained growth.
In another report released on February 26, RBC Capital also maintained a Hold rating on the stock with a $337.00 price target.
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Boston Beer (SAM) Company Description:
Boston Beer Co., Inc. engages in the business of alcoholic beverages. Its brands include Samuel Adams, Twisted Tea, Angry Orchard, and Truly Hard Seltzer. The company was founded by C. James Koch in 1984 and is headquartered in Boston, MA.
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