Molson Coors Beverage Company TAP exhibited strength on the bourses, rising 14.5% in the past six months. The stock has outperformed the Zacks Beverages - Alcohol industry and the broader Consumer Staples sector, which declined 18.1% and 8%, respectively, in the same time frame. Meanwhile, the S&P 500 index grew 11.1% in the six-month time.
The company is strictly focused on portfolio premiumization, in both Beer and Beyond Beer, to boost its product portfolio. TAP has also been making impressive innovations.
TAP’s Strategies Aid Rally
Molson Coors is one of the leading brewers, having a strong portfolio of well-established brands. In the United States, the company’s core power brands, including Coors Light, Miller Lite and Coors Banquet, have been performing well. In the fourth quarter of 2024, the brands retained above 80% of their combined volume share gains on a two-year stack basis, which shows an improvement from the second and third quarters.
The company has been investing in building the brand's awareness, its national scale and consumer base. In Canada, Coors Light has been the number one light beer in the industry. The Molson family of brands benefited from volume share for the fourth quarter and the year. This has helped the company to achieve 23 straight months of higher share growth. Carling is a top lager in the United Kingdom with robust brand equity.
TAP’s premiumization success in EMEA and APAC has been mostly driven by Madrí. The brand is surpassing expectations in Bulgaria as well. The successful re-launch of Caraiman in Romania has also been bolstering results. Molson Coors is focused on changing the shape of its global portfolio, given the success of premiumization in EMEA and APAC in Canada.
Molson Coors has strategic plans for Peroni and expanding in the non-alcoholic category. The consolidation of ZOA will contribute to the top line. The company has obtained exclusive rights through a license agreement to make, market and sell Fever-Tree products in the United States. Such strengths will boost sales and increase profitability.
TAP Price Performance
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TAP’s Earnings Estimate Revisions
Given the tailwinds surrounding the stock, the Zacks Consensus Estimate for 2025 and 2026 has been northbound. In the past seven days, the consensus estimate for earnings per share (EPS) has risen 3.6% to $6.35 for 2025 and 6.3% to $6.77 for 2026. This implies year-over-year earnings growth of 6.5% and 6.7%, respectively, for both years.
TAP Stock’s Attractive Valuation
Molson Coors’ stock is trading at a discount valuation relative to the industry. Going by the price/earnings ratio, the stock is currently trading at 9.84 on a forward 12-month basis, lower than 14.16 for the industry. Also, the stock is trading lower than its five-year high of 15.57.
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Final Words on TAP Stock
There is no doubt that the stock is attractively valued and robust strategies speak of major tailwinds for Molson Coors.
Management projects 2025 sales to increase in low-single-digit year over year on a constant-currency basis. It expects 2025 underlying EPS to grow in high single digits from 2024. The company also anticipates an annual net price increase in the band of 1-2% in North America. Supporting our investment thesis, Molson Coors currently sports a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider in Consumer Staples Space
We have highlighted other top-ranked stocks from the broader Consumer Staples space, namely Freshpet FRPT, Ollie's Bargain Outlet OLLI and Helen of Troy HELE.
Freshpet, a pet food company, has a trailing four-quarter average earnings surprise of 144.5%. FRPT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 27.2% and 228.6%, respectively, from the prior-year levels.
Ollie's is a value retailer of brand-name merchandise at drastically reduced prices. The company currently carries a Zacks Rank of 2. OLLI has a trailing four-quarter earnings surprise of 5%, on average.
The Zacks Consensus Estimate for Ollie's current financial-year’s sales and EPS implies growth of 8.3% and 13.1%, respectively, from the year-ago numbers.
Helen of Troy, a leading consumer products player that operates through a diversified portfolio of renowned brands, currently carries a Zacks Rank of 2. HELE has a trailing four-quarter negative earnings surprise of 4.3%, on average.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales and EPS indicates declines of 5.1% and 18.9%, respectively, from the year-ago quarter’s figures.
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Free: See Our Top Stock And 4 Runners UpMolson Coors Beverage Company (TAP) : Free Stock Analysis Report
Freshpet, Inc. (FRPT) : Free Stock Analysis Report
Helen of Troy Limited (HELE) : Free Stock Analysis Report
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
