Nomura Securities Downgrades Boston Beer Company (SAM) to Neutral

Nomura Securities downgraded Boston Beer Company (NYSE: SAM) from Buy to Neutral with a price target of $200.00 (from $260.00).

Analyst Edward Mundy commmented: "We downgrade Boston Beer Company to Neutral from Buy. This reflects intensified competition within the craft beer category, likely continued weakness in cider, and increased competition in the hard soda category. We reduce our F16E EPS to USD 8.00 from USD 8.20; however, low visibility on the top line could put further pressure on earnings. Our target price also comes down to USD 200 from USD 260. In beer, we believe that Rebel IPA line extensions and a new Sam Adams Nitro line-up have the potential to provide a halo effect for the whole of the Sam Adams brand family. Outside beer, the innovation pipeline would appear robust, including Coney Island Hard Root Beer. We believe that CFO-elect Frank Smalla (ex-Kraft) could accelerate efficiency moves over the next 18-24 months. As SVP Corporate Finance at Kraft, we believe that the CFO-elect would have been closely involved in the merger with Heinz. However, in the near term we would be surprised by a deal from the majors given the ongoing MillerCoors transaction. FY15E EPS at $7.30; FY16E EPS from $8.20 to $8.00."

For an analyst ratings summary and ratings history on Boston Beer Company click here. For more ratings news on Boston Beer Company click here.

Shares of Boston Beer Company closed at $177.52 yesterday.

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