Jefferies analyst, Kevin Grundy, is cautious on Boston Beer Company (NYSE: SAM) after another guide down. PT drops to $182, no change to the Hold rating.

SAM's 4Q revs were -3.9% below Street est. on -3% depletion declines (+5% 2-yr avg.) as weakness in the core Sam Adams brand and Angry Orchard persisted. Emblematic of SAM's troubling 2015 (and start to '16), the co. delivered 4% depletions growth in '15 vs. its initial 10-15% guidance. Slight GM % upside (50.6% vs. Street 50.4%) and lower SG&A spend (38.3% vs. 39.2%) resulted in +5.4% operating income upside. While topline weakness will be the focus, 4Q EPS of $1.21 EPS beat Street est. of $1.13.

SAM lowered its depletions/shipments guide (fourth time in five qtrs) from up mid-to-highsingle digits to up mid-single digits. Additionally, EPS guide of $7.60-$8.00 is -3% below Street's $8.05 at the midpoint. While SAM's depletions guide-down was generally expected, visibility remains very low and we see continued risk to SAM's outlook owing to (i) continued pressure in beer; and (ii) shortening innovation cycles in lateral alcohol categories

Key Takeaways:
1) Depletions guide may be ambitious given the inauspicious start to '16 (i.e. depletions -3% through 2/6) and ambiguity around turnaround strategies for Sam Adams and Angry Orchard, despite 1Q roll-out of Sam Nitro/grapefruit IPA and easing YoY comps (+7% in 1H, +2% in 2H)
2) cider - negative 4Q growth, potentially seeing consumer fatigue
3) Sam Adams - co. expects to be a slight negative on '16 growth trends, down from previous growth ambition.

PT drops to $182 from $188 based on 10.5x 4Q16 EV/EBITDA. This is below the industry average of 13x for consumer staples.

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Shares of Boston Beer Company closed at $184.43 yesterday.