Tuesday
Piper Sandler has maintained its Neutral rating and $28.00 price target on The Vita Coco Co. Inc (NASDAQ: COCO), citing potential shipment disruptions due to container shortages and the aftermath of a recent port strike. In anticipation of the third-quarter earnings for the beverage sector, the firm highlighted Vita Coco as facing the most significant downside risk among its covered companies.
According to Piper Sandler, Vita Coco may experience approximately a 15% disruption in its third-quarter 2024 shipments. The brief port strike, while resolved, is expected to take weeks before operations normalize. Additionally, Vita Coco's low inventory levels in the U.S. could pose a threat to the company's full-year guidance.
The analyst's commentary also pointed to other companies in the beverage industry facing challenges. Celsius Holdings Inc. (NASDAQ:CELH) is dealing with well-known headwinds, though the extent of the impact on margins from operating leverage is not yet determined. Molson Coors Beverage Company (TAP) is also expected to encounter downside risks to its revenue guidance, although earnings per share (EPS) projections align with the consensus.
Piper Sandler's outlook for Vita Coco reflects broader concerns within the beverage industry, where supply chain issues continue to affect operations. The firm's reiteration of the Neutral rating and price target suggests a cautious approach to Vita Coco's stock until the company navigates through these logistical challenges.
In other recent news, Molson Coors Brewing Company (NYSE:TAP) has been the subject of several key developments. TD Cowen has adjusted its price target for the company to $56.00, down from $58.00, maintaining a Hold rating. The firm's analyst cited a slowdown in U.S. market trends, resulting in a revised forecast for Molson Coors' fiscal year 2024 organic growth from a slight increase to a decrease. The estimated earnings per share (EPS) were also reduced to $5.50, below the FactSet consensus of $5.72.
Further analysis from TD Cowen suggests potential challenges for Molson Coors extending into the fiscal year 2025, related to volume headwinds and category weakness. In a separate development, Tilray (NASDAQ:TLRY) Brands acquired four craft breweries from Molson Coors, a move expected to grow Tilray's new beer accounts by 30%.
Piper Sandler maintained a Neutral rating on Molson Coors, despite a slowdown in U.S. retail sales. The firm adjusted its earnings per share estimates for Molson Coors, reducing the 2024 forecast to $5.77 and the 2025 projection to $5.90.
InvestingPro Insights
While Piper Sandler's outlook for Vita Coco and other beverage companies highlights potential challenges, InvestingPro data for Molson Coors Beverage Company (TAP) offers additional context for investors. Despite the anticipated downside risks to revenue guidance, TAP's financials show some positive indicators.
According to InvestingPro data, Molson Coors has a P/E ratio of 10.58, suggesting it may be undervalued compared to industry peers. The company's dividend yield stands at 3.21%, which could be attractive for income-focused investors. Additionally, TAP has maintained dividend payments for an impressive 50 consecutive years, demonstrating a strong commitment to shareholder returns.
InvestingPro Tips highlight that Molson Coors' management has been aggressively buying back shares, which can be seen as a vote of confidence in the company's future prospects. The company is also trading at a low earnings multiple, potentially indicating an opportunity for value investors.
It's worth noting that while Piper Sandler expects downside risks to TAP's revenue guidance, InvestingPro data shows a revenue growth of 6.8% over the last twelve months. This growth, coupled with the company's profitability over the same period, may provide some reassurance to investors concerned about the industry's challenges.
For a more comprehensive analysis, InvestingPro offers 8 additional tips for Molson Coors, which could provide valuable insights for investors navigating the current beverage industry landscape.
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