On Monday, Deutsche Bank adjusted its outlook on Boston Beer Company (NYSE:SAM), reducing the price target to $264 from the previous $293 while maintaining a Sell rating on the stock. The reassessment comes amid concerns over the company's sales and margin forecasts for the fiscal year 2024 (FY24).
The analyst from Deutsche Bank expressed concerns over the deceleration of Twisted Tea's growth in track channels and the underwhelming performance across Boston Beer's other product lines.
The firm anticipates that Boston Beer may face challenges in meeting sales targets and that margins could be pressured by investments aimed at stimulating top-line growth. These efforts are particularly relevant in light of recent changes within the company's management team.
Despite these challenges, the analyst expects that Boston Beer will likely reaffirm its FY24 guidance. The company may also provide a cautiously optimistic outlook for the upcoming summer selling season, even as it balances gains in Twisted Tea shelf space with potential losses in Truly and craft beer offerings.
The report highlighted the importance of management's strategies to maintain momentum for Twisted Tea, acknowledging the tough comparisons and distribution challenges ahead. Additionally, the analyst noted the need for Boston Beer to stabilize its Truly brand and improve demand for its other brands to support overall business growth.
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