Berenberg Downgrades Boston Beer Company (SAM) to Sell
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Berenberg downgraded Boston Beer Company (NYSE: SAM) from Hold to Sell with a price target of $135.00.
Analyst Adam Mizrahi commented, "The key reasons behind our original Sell case on Boston Beer grow stronger. We have so far downgraded our earnings forecasts on three occasions since we initiated in early 2016. And we are doing so again today. We see downside to consensus H2 estimates, which look for a broadly flat top line (H116: -4.0%) despite worsening depletion trends in Sam Adams and Angry Orchard, and the lapping of Root Beer launch comps. Longer-term, we retain our view that Jim Koch’s exit from the business is possible, but we now believe there is a more attractive alternative than a third-party sale: a leveraged ESOP. This offers Jim Koch tax benefits as well as the opportunity to protect his legendary status within the craft beer industry. Leveraged ESOPs are becoming increasingly common in US brewing."
Shares of Boston Beer Company closed at $163.18 yesterday.
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