Molson Coors Pre-Q4 Earnings Review: Buy the Stock or Stay Patient?

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$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$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]