By Sam Boughedda
Molson Coors Brewing (NYSE:TAP) shares are down more than 10% Tuesday after it posted earnings with profit in-line with expectations and revenue missing forecasts as macroeconomic impacts weigh on demand.
The company reported second-quarter earnings per share of $1.19, in line with the analyst estimates of $1.19, while revenue for the quarter came in at $2.92 billion versus the consensus estimate of $2.94 billion. Net sales decreased 0.6%, with the company saying a 1.7% decline in its U.S. sales volume weighed on revenue.
Molson Coors reaffirmed 2022 guidance for top and bottom-line growth but stated inherent uncertainties exist in the macroeconomic environment, including continued significant cost inflation.
Following the report, a Goldman Sachs analyst maintained a Neutral rating and a $54 price target on the stock.
The analyst stated: "TAP reported mixed Q2 results reflecting slightly lower topline growth & greater cost pressures offset by lower MG&A spend and tax leading to a slight EPS beat. Americas was weaker than expected as volume was pressured, down 8%, while EMEA/APAC outperformed.
"We are encouraged by signs of improvement in TAP's core brands and believe that the stock is favorably positioned as a defensive/value stock and could be a trade-down beneficiary if we potentially move into a recession. That said, we do not believe that TAP's core brands have been fully revitalized yet, and there are still some risks in the near term, especially on inflationary pressures."