Molson Coors Beverage Company (TAP) manufactures, markets, and sells beer and other malt beverage products in the Americas and internationally. The company has a market cap of $6.9 billion and offers flavored malt beverages, including hard seltzers, craft spirits, and ready-to-drink beverages under Arnold Palmer Spiked, Aspall Cider, Blue Moon, Beck's, Blue Run Spirits, Cobra, Corona Extra, Coors Original, and other well-known brands.
Companies with a market cap of $2 billion to $10 billion are typically called “mid-cap stocks.” TAP fits squarely into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the beverage-brewers industry.
However, the beverage giant currently trades 33.2% below its 52-week high of $54.82 recorded on Feb. 12. TAP has fallen 7.8% over the past three months, underperforming the State Street Consumer Staples Select Sector SPDR ETF’s (XLP) 1.5% decline over the same period.
In the longer term, TAP has delivered a similar performance. The stock has declined 16.9% over the past 52 weeks, lagging behind the 5.2% rise of XLP over the same period. TAP has been trading below its 200-day moving average since March and also below its 50-day moving average since the end of August.
TAP has not been the favored defensive stock choice for investors and analysts for a number of different reasons. The company’s unit sales over the past two years have fallen quite hard, suggesting the need for lower prices to stimulate growth. Additionally, its return on capital has come in at an underwhelming -0.2%, also indicating management’s difficulties in finding profitable growth opportunities and depleting historical profits. TAP’s operating margin has also fallen by 37% over the last year, again pointing out holes in the company’s profit generation strategies.
When stacked against its rival, Constellation Brands, Inc. (STZ) has declined 11.5% over the past year, outperforming TAP stock.
Wall Street has an unsure view of the stock currently. Among the 20 analysts tracking TAP, the overall consensus stands at a “Hold.” Its mean price target of $45.24 suggests a 23.5% upside potential from current price levels.
On the date of publication, Aritra Gangopadhyay did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.