Core Viewpoint - Molson Coors Beverage Company (TAP) has outperformed the industry and broader market due to its focus on premiumization, innovation, and brand revitalization, resulting in a stock price increase of 10.8% over the past three months compared to the industry's 5.2% growth [1]. Stock Performance - TAP stock closed at $61.58, approaching its 52-week high of $69.18, raising investor interest regarding future growth potential [3]. - The stock is trading above its 50-day and 200-day simple moving averages of $58.02 and $55.42, respectively, indicating a continued uptrend and positive market sentiment [4]. Growth Strategy - The company is committed to growing its market share through premiumization and innovation, focusing on its above-premium portfolio [6][9]. - Core brands like Coors Light and Miller Lite have maintained strong market share gains in the U.S., with Coors Banquet showing impressive growth [10]. - In Canada, Coors Light remains the leading light beer, while the Molson family of brands has seen sustained share growth [10]. - The company is implementing targeted expansion plans in the U.S. and has seen success in the U.K. and EMEA/APAC regions through premiumization efforts [11]. Financial Projections - For 2025, the company expects sales growth in the low single digits, with underlying earnings per share (EPS) rising in the high single digits and operating profit growing in the mid-single digits [13]. - Planned price increases of 1-2% in North America and adjustments in other markets are anticipated to contribute to margin expansion [13]. - The company has retained a significant portion of its share gains and is focused on premiumization across its portfolio [14]. Investment Rationale - Molson Coors' strategic focus on premiumization, strong brand positioning, and expansion into non-alcoholic beverages positions it for sustained growth [16]. - The company is expected to benefit from continued pricing power and operational improvements, making it a compelling investment opportunity [16].

Core Viewpoint - Molson Coors Brewing (TAP) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - For the fiscal year ending December 2025, Molson Coors is projected to earn $6.33 per share, reflecting a 6.2% increase from the previous year, with a 6% rise in the Zacks Consensus Estimate over the past three months [8]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Molson Coors to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for near-term price appreciation [10].

Company Overview - Molson Coors Brewing (TAP) is located in Golden and operates within the Consumer Staples sector, with a year-to-date share price change of 3.4% [3] - The company currently pays a dividend of $0.47 per share, resulting in a dividend yield of 3.17%, which is significantly higher than the Beverages - Alcohol industry's yield of 0.52% and the S&P 500's yield of 1.58% [3] Dividend Performance - The annualized dividend of Molson Coors Brewing is $1.88, reflecting a 6.8% increase from the previous year [4] - Over the past five years, the company has raised its dividend four times, averaging an annual increase of 0.43% [4] - The current payout ratio stands at 29%, indicating that the company distributes 29% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - The Zacks Consensus Estimate projects earnings for TAP to reach $6.34 per share in the fiscal year 2025, representing a 6.38% increase compared to the previous year [5] Investment Considerations - Dividends are favored by investors for various reasons, including enhancing stock investment profits and providing tax advantages [6] - Established firms with stable profits are typically viewed as the best dividend options, while high-growth companies and tech startups rarely offer dividends [7] - TAP is recognized as an attractive dividend investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Core Insights - Molson Coors Beverage Company (TAP) is identified as an attractive value opportunity in the Beverages - Alcohol industry, trading at a forward 12-month price-to-earnings ratio of 9.63, which is below the industry average of 15.98 and the Consumer Staples average of 17.89, indicating it is undervalued compared to peers [1] - The company has experienced a stock price increase of 19.1% over the past month, outperforming the broader industry return of 15.9%, the consumer staples sector's increase of 5.7%, and the S&P 500's dip of 5.1% [4] - TAP's strategic focus on premiumization and strong brand positioning, along with expansion into non-alcoholic beverages, positions it for sustained growth [17] Valuation and Performance - TAP's forward price-to-earnings ratio is 9.63, significantly lower than the industry average of 15.98 and the Consumer Staples average of 17.89, highlighting its value proposition [1] - The stock has gained 19.1% in the last month, outperforming both the industry and the S&P 500 [4] Growth Drivers - TAP is enhancing its market position through a strong portfolio of established brands and focusing on expanding its market share via innovation and premiumization [7] - The above-premium segment now constitutes 27% of total sales in 2024, with plans for further expansion in the U.S. [9] - The company has retained over 80% of market share gains from the past two years, with brands like Coors Light and Miller Lite showing significant growth [9] Strategic Initiatives - TAP's revitalization plan aims for sustainable top-line growth by streamlining operations and reinvesting in brands and capabilities [10] - A strategic partnership with Fevertree Drinks plc allows TAP to expand its U.S. non-alcoholic portfolio, gaining exclusive rights to sell premium mixers [11] - The company is also focusing on premiumization in EMEA and APAC while exiting low-margin contracts to concentrate on stronger areas [14] Financial Outlook - TAP expects sales growth in the low single digits for 2025, with underlying earnings per share (EPS) projected to rise in the high single digits [13] - Analysts have positively revised EPS estimates, with the current fiscal year consensus at $6.35 per share, indicating expected year-over-year growth rates of 6.5% [15] Conclusion - TAP's strategic focus on premiumization, strong brand positioning, and expansion into non-alcoholic beverages enhance its long-term potential, supported by solid financial projections for 2025 [17]

Core Viewpoint - Molson Coors Beverage Company (TAP) has demonstrated strong stock performance, rising 14.5% over the past six months, significantly outperforming the Zacks Beverages - Alcohol industry and the broader Consumer Staples sector, which saw declines of 18.1% and 8%, respectively [1] Group 1: Company Performance - TAP's core power brands, including Coors Light, Miller Lite, and Coors Banquet, have retained over 80% of their combined volume share gains on a two-year stack basis in Q4 2024, indicating strong brand performance [3] - The company has achieved 23 consecutive months of higher share growth, with Coors Light being the number one light beer in Canada [4] - The brand Madrí has driven premiumization success in EMEA and APAC, with notable performance in Bulgaria and a successful re-launch of Caraiman in Romania [5] Group 2: Strategic Initiatives - Molson Coors is focused on portfolio premiumization in both Beer and Beyond Beer, enhancing its product offerings through impressive innovations [2] - The company has strategic plans for expanding the Peroni brand and the non-alcoholic category, with the consolidation of ZOA expected to contribute positively to revenue [6] - A license agreement to market and sell Fever-Tree products in the U.S. is anticipated to boost sales and profitability [6] Group 3: Financial Outlook - The Zacks Consensus Estimate for TAP's earnings per share (EPS) has increased by 3.6% to $6.35 for 2025 and by 6.3% to $6.77 for 2026, indicating year-over-year earnings growth of 6.5% and 6.7%, respectively [8] - Management projects low-single-digit sales growth for 2025 on a constant-currency basis and expects underlying EPS to grow in high single digits from 2024 [11] - The stock is currently trading at a price/earnings ratio of 9.84, lower than the industry average of 14.16, suggesting an attractive valuation [9]

Core Viewpoint - Molson Coors Brewing (TAP) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Molson Coors reflects an improved earnings outlook, which is likely to positively impact its stock price [4][6]. Impact of Earnings Estimates on Stock Prices - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, influenced by institutional investors [5]. - Rising earnings estimates and the subsequent rating upgrade suggest an improvement in Molson Coors' underlying business, which should lead to higher stock prices [6]. Importance of Earnings Estimate Revisions - Empirical research shows a strong correlation between earnings estimate revisions and stock movements, making tracking these revisions beneficial for investment decisions [7]. - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Specific Earnings Estimates for Molson Coors - Molson Coors is projected to earn $6.35 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 6.5% [9]. - Over the past three months, the Zacks Consensus Estimate for Molson Coors has risen by 6.1% [9]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings across over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [10]. - The upgrade of Molson Coors to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [11].

Financial Performance - For the year ended December 31, 2024, net sales were $11,627 million, a decrease of 0.6% from $11,702 million in 2023[351]. - Gross profit for 2024 was $4,533.4 million, representing an increase of 3.8% compared to $4,368.8 million in 2023[351]. - Operating income increased to $1,753.2 million in 2024, up 22% from $1,438.2 million in 2023[351]. - Net income attributable to Molson Coors Beverage Company for 2024 was $1,122.4 million, a 18.3% increase from $948.9 million in 2023[351]. - Basic earnings per share for 2024 was $5.38, compared to $4.39 in 2023, reflecting a 22.5% increase[351]. - Comprehensive income attributable to Molson Coors Beverage Company was $879.8 million for 2024, down from $1,038.1 million in 2023, reflecting a decrease of approximately 15%[354]. - Net income for the year ended December 31, 2024, was $1,157.7 million, an increase of 21% compared to $956.4 million in 2023[354]. Debt and Interest - As of December 31, 2024, the company had $4.9 billion in USD denominated fixed rate debt and $1.2 billion in foreign currency denominated fixed rate debt[319]. - Total interest expense for 2024 was $282.7 million, an increase from $234.0 million in 2023[351]. - Long-term debt increased to $6,113.9 million in 2024 from $5,312.1 million in 2023, reflecting an increase of 15%[356]. - The company issued EUR 800 million 3.8% senior notes on May 29, 2024, with total proceeds of $863.7 million[507]. Cash Flow and Assets - Cash and cash equivalents increased to $969.3 million in 2024 from $868.9 million in 2023, representing an increase of 11.7%[356]. - Net cash provided by operating activities for 2024 was $1,910.3 million, compared to $2,079.0 million in 2023, indicating a decrease of approximately 8.1%[360]. - Total assets as of December 31, 2024, were $26,064.3 million, a decrease from $26,375.1 million in 2023[356]. - Total liabilities decreased to $12,611.6 million in 2024 from $12,940.0 million in 2023, a reduction of approximately 2.5%[356]. Inventory and Expenses - Inventories decreased to $727.8 million in 2024 from $802.3 million in 2023, a decline of approximately 9.3%[356]. - Total marketing and advertising expenses, excluding depreciation and amortization, were approximately $1.1 billion for the years ended December 31, 2024 and 2023[393]. - The cost of goods sold includes brewing materials, packaging materials, and manufacturing expenses, impacting overall profitability[392]. Risk Management - The company manages foreign currency exposures through foreign currency forward contracts and net investment hedges[323]. - The company hedges its exposure to fluctuations in commodity prices, specifically for natural gas, barley, diesel, and aluminum[326]. - The company is exposed to volatility in interest rates, particularly related to U.S. Department of Treasury rates and Canadian government rates[317]. - The company uses derivatives for risk management purposes only, not for trading or speculative purposes[424]. Acquisitions and Investments - The company increased its investment in ZOA to 51% for a cash consideration of $53 million, recorded as a business combination[369]. - The company acquired a 75% equity interest in Blue Run for $77 million, including $64 million in cash, to expand its presence in the spirits category[371]. - The company obtained exclusive rights to produce, market, and sell Fever-Tree products in the U.S. effective February 1, 2025, and made an investment of approximately $90 million in Fever-Tree Drinks Plc[450]. - The company acquired the remaining 49.9% ownership interest in Cobra U.K. for a cash payment of $89 million, finalizing the transaction on October 21, 2024[459]. Shareholder Returns - The company paid dividends totaling $369.2 million in 2024, up from $354.7 million in 2023, marking an increase of 4.3%[360]. - Dividends declared to eligible shareholders totaled $1.76 per share for the year ended December 31, 2024, compared to $1.64 per share in 2023[406]. - The company declared a quarterly dividend of $0.47 per share, payable on March 14, 2025, to shareholders of Class A and Class B common stock[451]. Accounting and Reporting - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the management's assessment[334]. - The company adopted ASU 2023-07, improving reportable segment disclosures, which impacted the presentation and disclosure of segment reporting but not the financial position or results of operations[452]. - The company has no new accounting pronouncements that significantly impact the consolidated financial statements other than those noted[456].

Core Insights - Molson Coors Beverage Company reported fourth-quarter 2024 results with both sales and earnings exceeding expectations, despite a year-over-year decline in sales and an increase in earnings [1][3][4]. Financial Performance - Adjusted earnings per share (EPS) for the quarter were $1.30, reflecting a 9.2% increase year over year, surpassing the Zacks Consensus Estimate of $1.13 [3]. - Net sales decreased by 2% year over year to $2.74 billion, but this was above the Zacks Consensus Estimate of $2.71 billion [4]. - Financial volumes dropped 6.4% year over year, primarily due to lower shipments and contract brewing volumes in the Americas [6][10]. - Gross profit increased by 1% year over year to $1.04 billion, with a gross margin improvement of 110 basis points to 38% [7]. Segment Performance - In the Americas, net sales fell 2.6% year over year to $2.17 billion, influenced by lower financial volumes and unfavorable currency impacts, although it beat the Zacks Consensus Estimate of $2.11 billion [9]. - The EMEA&APAC segment saw net sales rise 0.4% year over year to $568.7 million, benefiting from a favorable price and sales mix, despite a decline in financial volumes [13]. Cost Management - Marketing, general, and administrative (MG&A) expenses decreased by 4.9% year over year to $684.7 million, attributed to lower incentive compensation costs and reduced marketing expenses [7]. - Underlying earnings before taxes (EBT) slipped 1.4% year over year to $341 million, with cost inflation partially offset by higher pricing and lower MG&A expenses [8]. Cash Flow and Debt - As of December 31, 2024, the company had cash and cash equivalents of $969.3 million and total debt of $6.15 billion, resulting in a net debt of $5.18 billion [15]. - Net cash provided by operating activities for 2024 was $1.91 billion, with adjusted underlying free cash flow of $1.24 billion [15]. Future Outlook - For 2025, Molson Coors projects low-single-digit sales growth on a constant-currency basis and expects underlying EPS to grow in the high single digits [17][18]. - The company anticipates capital expenditures of $750 million and underlying free cash flow of $1.3 billion for 2025 [19].

Financial Data and Key Metrics Changes - In Q4 2024, consolidated net sales revenue decreased by 1.9%, underlying pretax income decreased by 0.9%, while underlying earnings per share increased by 9.2% [11] - For the full year, consolidated net sales revenue was down 0.6%, underlying pretax income was up 5.6%, and underlying earnings per share was up 9.8% [13] Business Line Data and Key Metrics Changes - In the Americas, Canada performed strongly, while U.S. brand volume was down 3% due to the exit of Pabst contract brewing, impacting financial volume by approximately 450,000 hectoliters [12][15] - U.S. shipments trailed brand volumes by about 150,000 hectoliters, leading to a shipping-to-consumption model for the year [12] - EMEA and APAC volumes were affected by competition in the UK and a softer industry in Central and Eastern Europe, but net sales revenue per hectoliter grew by 7.8% [13] Market Data and Key Metrics Changes - The U.S. beer industry showed signs of improvement in Q4, with better-than-expected performance compared to earlier in the year [14] - In Canada, the beer industry trends are similar to the U.S., with premiumization continuing to play a significant role [68] Company Strategy and Development Direction - The company is focused on premiumization across its portfolio, with above-premium products accounting for 27% of total net brand revenue for the year [24] - The company is investing in its core power brands and expanding its non-alcoholic beverage offerings, including a strategic partnership with Fever-Tree [33][119] - The company aims to achieve long-term growth objectives through a diversified portfolio and strong cash generation [34][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and long-term growth algorithm, despite macroeconomic challenges [34][42] - The outlook for 2025 includes low single-digit net sales revenue growth and mid-single-digit underlying pretax income growth, with a focus on premiumization and cost efficiencies [44][45] Other Important Information - The company returned $1 billion to shareholders through dividends and share repurchases, with a commitment to continue this trend [10][41] - The net debt to underlying EBITDA ratio was 2.1 times, aligning with the long-term target of under 2.5 times [39] Q&A Session All Questions and Answers Question: Comments on the beer category and near-term evolution - Management noted that Q4 was the best quarter of industry performance in 2024, despite earlier volatility due to various factors [59] Question: Top line guidance and category growth assumptions - Management indicated that category growth rates are expected to improve, with premiumization trends continuing to support growth [68] Question: Context on margins and commodity inflation - Management discussed expectations for gross margin improvement driven by positive net pricing and cost savings [75] Question: Demand outlook and potential headwinds - Management acknowledged concerns about younger consumers drinking less frequently but emphasized the company's strategy to diversify into non-alcoholic beverages [110] Question: Economics of the Fever-Tree agreement - Management highlighted the potential for growth with Fever-Tree and the integration process, noting that initial costs would be in the tens of millions [130]

Core Insights - Molson Coors Brewing reported revenue of $2.74 billion for the quarter ended December 2024, a decrease of 2% year-over-year, but exceeded the Zacks Consensus Estimate by 1.11% [1] - The company's EPS was $1.30, up from $1.19 in the same quarter last year, representing a surprise of 15.04% over the consensus estimate of $1.13 [1] Financial Performance Metrics - Consolidated brand volume was 18.87 million, surpassing the three-analyst average estimate of 18.65 million [4] - Brand volumes in the Americas reached 14.22 million, exceeding the average estimate of 13.45 million based on two analysts [4] - Brand volumes for EMEA & APAC were 4.66 million, below the two-analyst average estimate of 4.94 million [4] - Net sales in the Americas were $2.17 billion, higher than the three-analyst average estimate of $2.11 billion, but represented a year-over-year decline of 2.6% [4] - Net sales for unallocated & eliminations were -$7 million, compared to the average estimate of -$5.93 million, showing a year-over-year increase of 1.5% [4] - Net sales for EMEA & APAC were $568.70 million, below the estimated $592.04 million, but showed a year-over-year increase of 0.4% [4] Stock Performance - Molson Coors shares returned -1.9% over the past month, while the Zacks S&P 500 composite increased by 3.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]