Molson Coors (TAP) PT Lowered to $51 at Citi

Citi analyst Filippo Falorni lowered the price target on Molson Coors (NYSE: TAP) to $51.00 (from $56.00) while maintaining a Neutral rating.

The analyst comments "We expect TAP’s topline trends to remain pressured in 2Q’25 due to several factors, including (1) beer category softness, (2) TAP’s cycling of 1H’24’s inventory build ahead of last year’s Ft. Worth brewery strike (~350K HL of overshipment in 2Q’24, of which we estimate only less-than-half was due to normal seasonal inventory build), (3a) Pabst/Labatt contract brewing volumes coming out of the system in 2025, which is expected to have an outsized impact on 1H’25 given last year’s Pabst wind-down phasing (we estimate ~570K HL of the total ~1.9M HL will come out in 2Q’25, or a ~3.5 pt headwind to Americas volumes), and (3b) TAP’s regional craft brewery divestitures that occurred in 3Q’24 (which mgmt. has previously noted will have a relatively smaller impact vs. the contract brewing termination). We expect these headwinds will be partially offset by ~1.6 pt volume contribution from Fever-Tree, which TAP secured exclusive US commercialization rights to starting Feb. 1."

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