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Here's How Molson Coors (TAP) Is Placed Ahead Of Q4 Earnings

By Zacks Investment ResearchStock MarketsFeb 05, 2020 10:37PM ET
Here's How Molson Coors (TAP) Is Placed Ahead Of Q4 Earnings
By Zacks Investment Research   |  Feb 05, 2020 10:37PM ET
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Molson Coors Beverage Company (NYSE:TAP) is slated to release fourth-quarter 2019 results on Feb 12. In the last reported quarter, the leading alcohol company delivered a positive earnings surprise of 1.4%. However, it delivered a negative earnings surprise of 1.9%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s fourth-quarter earnings is 77 cents, suggesting 8.3% decline from the year-ago reported figure. The consensus mark has moved downward in the past 30 days. For fourth-quarter revenues, the consensus mark is pegged at $2.51 billion, suggesting 3.6% growth from the prior-year reported figure.

Key Factors to Note

Molson Coors has been benefiting significantly from the execution of premiumization and cost-saving initiatives, as well as the revitalization plan. Gains from restructuring initiatives are likely to have partly reduced overhead costs and in turn aided its bottom-line performance in the to-be-reported quarter.

The company has been focusing on initiatives to improve the supply-chain network, enhance efficiencies across the business to generate additional resources, and invest in brand building and innovation. These efforts are likely to have contributed meaningfully to growth in the fourth quarter.

Its top line has been soft owing to volume decline across all segments, thanks to a challenging industry backdrop. This apart, commodity inflation and higher input costs have been hurting the bottom line.

In the last earnings call, management stated that higher input costs, volume deleverage and increased packaging expenses are expected to impact cost of goods sold per hectoliter. These factors are likely to get reflected on margins and in turn the bottom line.

What the Zacks Model Says

Our proven model predicts an earnings beat for Molson Coors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, Molson Coors has a Zacks Rank #3 and an Earnings ESP of +4.97%.

Other Stocks With Favorable Combination

Here are some other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming releases:

Coca Cola Femsa S.A.B. de C.V. (NYSE:KOF) has an Earnings ESP of +5.47% and a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Monster Beverage Corporation (NASDAQ:MNST) currently has an Earnings ESP of +3.38% and a Zacks Rank #2.

The J. M. Smucker Company (NYSE:SJM) presently has an Earnings ESP of +0.39% and a Zacks Rank #3.

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Molson Coors Brewing Company (TAP): Free Stock Analysis Report

Monster Beverage Corporation (MNST): Free Stock Analysis Report

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Zacks Investment Research
Here's How Molson Coors (TAP) Is Placed Ahead Of Q4 Earnings

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Here's How Molson Coors (TAP) Is Placed Ahead Of Q4 Earnings

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