Molson Coors (TAP) PT Raised to $46 at JPMorgan After Update on Negative 1Q21 Inputs - JPMorgan

JPMorgan analyst Andrea Teixeira raised the price target on Molson Coors (NYSE: TAP) to $46.00 (from $43.00) after the company provided an update on the impacts of the adverse winter weather in Texas in January that shut down its Fort Worth brewery for 11 days additionally, the cybersecurity incident disclosed on March 11 impacted production and shipments. While all breweries are now producing and shipping product, the company continues to experience delays and disruptions. Specifically, the company estimates that the storms and cybersecurity attack will shift 1.8-2.0 million HL of production and shipments and $120-140 million underlying EBITDA from Q121 to the balance of the year. TAP reaffirmed its FY2021 guidance including MSD revenue growth and “approximately flat” underlying FX neutral EBITDA vs. 2020.

The analyst stated "We think this substantial shortfall in Q1 will generate out of stocks that may not be fully offset in the balance of the year and, as we anticipated in our downgrade report, will bring risk to the flat EBITDA guidance. Management also believes the board will be able to reinstate dividend payments in the second half. While we are increasing our EBITDA estimate by 2% by cutting marketing spend, we are still below consensus and guidance. Our Dec 2021 price target moves to $46 from $43, but we reiterate our UW rating on higher execution risk."

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