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Molson Coors Beverage (TAP) Nears Earnings With Optimism, Is It Still A Bargain?

Simply Wall St · 1d ago

Molson Coors Beverage (TAP) heads into its next earnings report with expectations shaped by a recent pattern of topping profit forecasts, which puts extra focus on whether that performance rhythm holds this quarter.

In the short term, Molson Coors Beverage has picked up some momentum, with a 1-day share price return of 1.0% and a 7-day share price return of 4.36% at a recent share price of $38.52. This comes even though the year-to-date share price return is down 18.73% and the 1-year total shareholder return has fallen 13.85%, suggesting that traders are reacting to earnings optimism while longer term holders have seen weaker results.

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Molson Coors Beverage has bounced in the past week while still carrying a steeper year to date slide. This puts a simple choice in front of you: is that recent pop enough to justify buying now instead of waiting for a cheaper entry?

Most Popular Narrative: 15% Undervalued

On the widely followed narrative, Molson Coors Beverage screens as undervalued, with a fair value of $45.24 against a recent $38.52 share price. This puts the onus on whether its mix shift and cost program can actually reset earnings.

The three year US$450m cost savings program, including brewery closures, efficiency gains across cost of goods sold and MG&A, and broader supply chain restructuring, is designed to counter input cost and logistics inflation and could support future net margin and earnings improvement.

See why 24 investors see Molson Coors Beverage as 15% undervalued.

Result: Fair Value of $45.24 (UNDERVALUED)

Still, the Molson Coors Beverage story can break if U.S. beer volumes keep sliding faster than its own shipments or if input cost inflation outruns that US$450m savings plan.

Find out about the key risks to this Molson Coors Beverage narrative.

Next Steps

Mixed messages around Molson Coors Beverage can be useful if you move quickly and test them against your own view of the figures. To weigh up both the potential upside and the issues investors are watching, start with the 3 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.