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]

Financial Performance - Fourth quarter net sales decreased by 2.0% to $2,735.6 million, resulting in a full year decline of 0.6% to $11,627.0 million[10]. - U.S. GAAP income before income taxes increased by 109.2% to $346.3 million in Q4, and full year income improved by 20.0% to $1,503.0 million[10]. - Full year diluted EPS grew by 22.4% to $5.35, while underlying diluted EPS increased by 9.8% to $5.96[10]. - The underlying income before income taxes improved by 54.9% in constant currency to $185.9 million for the EMEA&APAC segment, compared to $126.8 million in 2023[22][30]. - The income before income taxes for the consolidated results in Q4 2024 was $346.3 million, a substantial increase of 109.2% from $165.5 million in Q4 2023[54]. - The company reported a 20.0% increase in income before income taxes for the full year 2024, totaling $1,503.0 million compared to $1,252.5 million in 2023[54]. - Net income attributable to Molson Coors Beverage Company for 2024 was $1.12 billion, an increase from $948.9 million in 2023[51]. - The underlying (Non-GAAP) net income for the year ended December 31, 2024 was $1,250.1 million, reflecting an increase from $1,179.4 million in 2023[66]. - U.S. GAAP Net income for Q4 2024 was $293.7 million, significantly up from $105.5 million in Q4 2023[80]. Sales and Volume - Financial volume decreased by 6.4% in Q4, primarily due to lower shipments and contract brewing volumes in the Americas[12]. - The Americas segment faced challenges due to a negative 3% impact from the wind down of a contract brewing agreement[5]. - Core power brands in the U.S. retained over 80% of their combined volume share gains compared to the previous year, with a 1.7 share point increase[6]. - Net sales for the year ended December 31, 2024, decreased by 0.6% to $9,240.2 million compared to $9,425.2 million in 2023, driven by lower financial volumes, partially offset by a favorable price and sales mix[27][28]. - Financial volumes decreased by 5.0% for the year, primarily due to lower shipments in the Americas and a decline in EMEA&APAC volumes[28]. - The Americas segment reported a net sales decrease of 2.6% for the three months ended December 31, 2024, primarily due to lower financial volumes and unfavorable foreign currency impacts[18][19]. - In Q4 2024, net sales in the Americas decreased by 2.6% to $2,173.9 million compared to $2,231.1 million in Q4 2023[54]. - The total worldwide brand volume for the Americas in Q4 2024 was 14.215 million hectoliters, down 2.2% from 14.531 million hectoliters in Q4 2023[55]. - For the full year 2024, financial volume in the Americas was 58.905 million hectoliters, a decline of 5.7% from 62.491 million hectoliters in 2023[56]. - In EMEA&APAC, net sales increased by 0.4% to $568.7 million in Q4 2024, compared to $566.6 million in Q4 2023[54]. Costs and Expenses - Cost of goods sold decreased by 3.4% on a reported basis, while cost of goods sold per hectoliter increased by 3.2% due to inflation and unfavorable mix[14]. - The cost of goods sold (COGS) decreased by 3.3% on a reported basis, primarily due to lower financial volumes, despite a 1.8% increase in COGS per hectoliter due to cost inflation[31]. - The company reported a COGS of $1,698.1 million for the three months ended December 31, 2024, compared to $1,757.8 million for the same period in 2023, reflecting a year-over-year decrease of approximately 3.4%[65]. - Total depreciation and amortization for Q4 2024 was $247.3 million, compared to $174.2 million in Q4 2023, reflecting a 42.0% increase[80]. Shareholder Returns - The company returned over $1 billion in cash to shareholders through dividends and share repurchases in 2024[4]. - The company declared a cash dividend of $0.44 per share, totaling $1.76 per share for the year ended December 31, 2024[36]. - The company declared a quarterly dividend of $0.47 per share, to be paid on March 14, 2025[41]. - The company paid dividends totaling $369.2 million in 2024, compared to $354.7 million in 2023, an increase of approximately 4.00%[53]. Debt and Cash Flow - The net debt to underlying EBITDA ratio ended the year at 2.09 times, aligning with the long-term target of under 2.5 times[9]. - Total debt as of December 31, 2024, was $6,146.1 million, with a net debt to underlying EBITDA ratio of 2.09x, down from 2.21x in 2023[36]. - The underlying free cash flow generated was $1,240.6 million for the year, a decrease of $179.4 million from the prior year[36]. - The company expects underlying free cash flow of approximately $1.3 billion for 2025, with a margin of plus or minus 10%[43]. - The company incurred a consolidated net interest expense of $215 million for 2025, with a margin of plus or minus 5%[43]. - The company reported a net cash decrease of $1,138.4 million from financing activities in 2024, compared to a decrease of $981.4 million in 2023, indicating a worsening cash flow situation[53]. - Cash and cash equivalents rose to $969.3 million in 2024, compared to $868.9 million in 2023, an increase of approximately 11.88%[53]. Guidance and Projections - Fiscal 2025 guidance aligns with the long-term growth algorithm for both top-line and bottom-line performance[1]. - Underlying earnings per share for 2025 are projected to increase by a high single-digit percentage compared to 2024[43]. - Capital expenditures for 2025 are estimated at $750 million, with a margin of plus or minus 5%[43]. - The underlying effective tax rate for 2025 is expected to be in the range of 22% to 24%[43]. Acquisitions and Investments - The company has acquired exclusive rights to produce and sell Fever-Tree products in the U.S. and invested approximately $90 million in Fever-Tree Drinks Plc[39]. Non-GAAP Measures - The company emphasized the importance of underlying free cash flow as a measure of its ability to generate cash and enhance shareholder value, calculated as net cash provided by operating activities less capital expenditures[64]. - The underlying effective tax rate for the company was adjusted to exclude the tax impact of non-GAAP adjustment items, which can significantly affect reported earnings[64]. - Non-GAAP adjustments for Q4 2024 included a restructuring cost of $83.8 million, while the previous year had a minimal impact from restructuring of $2.3 million[65]. - The company provided guidance for non-GAAP financial measures, indicating that these metrics are essential for operational and financial decision-making despite the challenges in predicting non-GAAP adjustment items[64].

Core Insights - Molson Coors Beverage Company (TAP) is anticipated to report declines in both revenue and earnings for the fourth quarter of 2024, with revenues expected at $2.7 billion, reflecting a 3% decrease year-over-year, and earnings per share (EPS) projected at $1.13, down 5% from the previous year [1][2] Financial Performance - The Zacks Consensus Estimate for 2024 revenues stands at $11.6 billion, indicating a slight decline of 0.9% from the prior year, while the earnings estimate remains unchanged at $5.79 per share, suggesting a growth of 6.6% year-over-year [2] - In the last reported quarter, Molson Coors achieved an earnings surprise of 9.1%, with a trailing four-quarter average earnings surprise of 15.9% [3] Earnings Prediction Model - The current Zacks Rank for Molson Coors is 3 (Hold), and the Earnings ESP is -0.15%, indicating that the model does not predict an earnings beat for this reporting cycle [4] Market Trends and Strategies - Molson Coors has shown strong brand resilience, particularly in the U.S. market, with core brands like Coors Light and Miller Lite performing well. Coors Banquet has seen notable volume growth and market share expansion for 13 consecutive quarters [5] - The company's Acceleration Plan has supported market share gains through innovation and premiumization, with strategic investments in core brands contributing to top-line growth [6] - Enhanced digital capabilities and expansion of brewing and packaging operations in the U.K. have been driven by the success of the Madri brand [7] Regional Performance - Strong results in the EMEA and APAC segments, along with growth in Canada, are supported by favorable net pricing and higher brand volumes. Cost-saving initiatives have also contributed to financial stability and margin expansion [8] Future Outlook - Molson Coors has revised its 2024 sales forecast to a 1% decline on a constant-currency basis, down from previous expectations of low-single-digit growth, citing macroeconomic pressures and inflationary impacts on costs [11][12] - The company expects COGS per hectoliter to rise year-over-year due to ongoing inflation and volume deleverage tied to U.S. shipment trends [12] Valuation - From a valuation perspective, Molson Coors is trading at a forward 12-month price-to-earnings ratio of 9.1X, which is below both its five-year high of 15.57X and the industry average of 13.88X, presenting an attractive opportunity for investors [13] Stock Performance - Over the past three months, TAP shares have declined by 10.3%, compared to a 15.5% decline in the industry [14]

The upcoming report from Molson Coors Brewing (TAP) is expected to reveal quarterly earnings of $1.13 per share, indicating a decline of 5% compared to the year-ago period. Analysts forecast revenues of $2.71 billion, representing a decrease of 3% year over year.The consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Prior t ...

Molson Coors Brewing (TAP) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on February 13, 2025, might help the stock move higher if these key numbers are bet ...