Todays Report: The Boston Beer Co. (SAM) Cut to “Sell” at Zacks Investment Research

The Boston Beer Co. (SAM) Cut to “Sell” at Zacks Investment Research

Boston Beer Co. (NYSE:SAM) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued on Wednesday.

According to Zacks, “Boston Beer is facing a tough time due to troubles at its Samuel Adams brand, which has been up against severe competition in the craft beer market, and a weakness in the cider class. This resulted in soft depletion trends and lower shipments in  second-quarter fiscal 2016. Taking into account the first-half trends, the company lowered its earnings and depletions outlook for 2016. Also, Boston Beer remains vulnerable to the potential implementation of an excise tax on spirits. However, we believe Boston Beer’s practice of acquiring assets to expand geographically will help it to gain significant market share. Also, the company’s brand-building efforts and initiatives to add new products to its portfolio remain key revenue drivers. Management’s plan of aligning cost structure with volumes should also enhance performance. Estimates have been largely stable going into the third quarter earnings release.”

Several other analysts also recently weighed in on the stock. Jefferies Group reiterated a “hold” rating and issued a $151.00 price objective (up from $145.00) on shares of Boston Beer in a research report on Monday, July 25th. Susquehanna reiterated a “hold” rating on shares of Boston Beer in a research report on Monday, August 22nd. Cowen and Company downgraded shares of Boston Beer from a “market perform” rating to an “underperform” rating and cut their price objective for the company from $170.00 to $128.00 in a research report on Wednesday, September 21st. Credit Suisse Group AG initiated coverage on shares of Boston Beer in a research report on Thursday, September 15th. They issued an “underperform” rating and a $156.00 price objective on the stock. Finally, William Blair initiated coverage on shares of Boston Beer in a research report on Wednesday, September 21st. They issued an “outperform” rating on the stock. Four investment analysts have rated the stock with a sell rating, nine have assigned a hold rating and one has assigned a buy rating to the company. Boston Beer currently has a consensus rating of “Hold” and a consensus target price of $173.91.

Boston Beer (NYSE:SAM) traded up 3.02% during mid-day trading on Wednesday, hitting $163.00. 127,783 shares of the stock traded hands. Boston Beer has a 12-month low of $145.33 and a 12-month high of $260.51. The firm has a market cap of $2.01 billion, a PE ratio of 24.41 and a beta of 0.64. The stock has a 50 day moving average price of $167.51 and a 200 day moving average price of $168.08.

Boston Beer (NYSE:SAM) last posted its quarterly earnings results on Thursday, July 21st. The company reported $2.06 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.94 by $0.12. Boston Beer had a net margin of 9.22% and a return on equity of 19.60%. The company had revenue of $244.80 million for the quarter, compared to the consensus estimate of $238.87 million. On average, analysts expect that Boston Beer will post $6.46 earnings per share for the current fiscal year.

In other news, VP David L. Grinnell sold 1,000 shares of Boston Beer stock in a transaction that occurred on Thursday, July 21st. The shares were sold at an average price of $164.81, for a total value of $164,810.00. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Martin F. Roper sold 7,000 shares of Boston Beer stock in a transaction that occurred on Monday, August 29th. The stock was sold at an average price of $191.12, for a total transaction of $1,337,840.00. Following the completion of the transaction, the insider now directly owns 12,273 shares in the company, valued at approximately $2,345,615.76. The disclosure for this sale can be found here. 31.30% of the stock is currently owned by insiders.

Institutional investors have recently made changes to their positions in the company. Tower Research Capital LLC TRC increased its position in Boston Beer by 7.6% in the second quarter. Tower Research Capital LLC TRC now owns 965 shares of the company’s stock valued at $165,000 after buying an additional 68 shares during the period. Advisor Group Inc. purchased a new position in Boston Beer during the second quarter valued at $199,000. Teacher Retirement System of Texas increased its position in Boston Beer by 12.9% in the second quarter. Teacher Retirement System of Texas now owns 1,267 shares of the company’s stock valued at $217,000 after buying an additional 145 shares during the period. Diversified Trust Co purchased a new position in Boston Beer during the second quarter valued at $218,000. Finally, Pacad Investment Ltd. purchased a new position in Boston Beer during the second quarter valued at $222,000. 65.23% of the stock is currently owned by institutional investors.

Boston Beer Company Profile

The Boston Beer Company, Inc (Boston Beer) is a craft brewer in the United States. The Company is engaged in the business of producing and selling alcohol beverages primarily in the domestic market and in international markets. The Company operates through two segments: Boston Beer Company segment and A&S Brewing Collaborative segment.

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