Jefferies keeps hold on beer stocks after industry event

Investing.com -- Jefferies maintained its hold rating on Constellation Brands (NYSE: STZ), Molson Coors (NYSE: TAP), and Boston Beer Company (NASDAQ: SAM), while keeping a buy rating on Tilray Brands (NASDAQ: TLRY) after attending the National Beer Wholesalers Association's Annual Convention.

The conference showed industry concerns about beer volumes, which declined 4% over the last 12 weeks. Distributors at the event said getting back to 0-1% sales growth is now the goal for the category.

Michelob Ultra, Busch Light, and Coors Banquet were cited as successful brands at the convention. Michelob Ultra and Busch Light each grew 3% over the last 12 weeks, while Coors Banquet increased 7%. Pacifico saw an 18% rise during the same period.

Conference speakers said beer brands need to work harder to remain central to social occasions. Multiple presenters called for the industry to better promote moderate drinking as part of social connection and health-focused lifestyles.

Jefferies noted that when ready-to-drink cocktails are included in the category, the overall decline is about 2.4%. The firm said these canned products function similarly to beer and should be counted in the category.

Distributors at the event discussed focusing on areas they can control, including artificial intelligence adoption and cost savings, to maintain profitability. They also expressed interest in expanding into spirits and soft drinks through existing distribution networks while beer remains their primary business.

The firm said successful brands have clear positioning and consistent execution, knowing their target audience. Michelob Ultra built relevance around fitness while Busch Light focused on outdoor activities.

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