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]

Core Viewpoint - Molson Coors Brewing reported quarterly earnings of $1.30 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, and showing an increase from $1.19 per share a year ago, indicating a 15.04% earnings surprise [1][2] Financial Performance - The company achieved revenues of $2.74 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.11%, although this represents a decline from $2.79 billion in the same quarter last year [2] - Over the last four quarters, Molson Coors has exceeded consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Molson Coors shares have declined approximately 6.8% since the beginning of the year, contrasting with the S&P 500's gain of 2.9% [3] - The current Zacks Rank for Molson Coors is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $2.5 billion, while the estimate for the current fiscal year is $5.94 on revenues of $11.51 billion [7] - The trend of estimate revisions for Molson Coors is mixed, which could change following the recent earnings report [6] Industry Context - The Beverages - Alcohol industry is currently ranked in the bottom 12% of over 250 Zacks industries, indicating potential challenges for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]