Bernstein sees Brown-Forman, Constellation well-placed in US alcohol market

Boston Beer

13/10/2023 13:44

** Bernstein updates price targets on U.S. alcohol companies
        ** Says Q3 has been brutal for U.S. alcoholic beverages
segment with de-ratings across the board, but Bernstein believes
some concerns were misplaced and there is an investment
opportunity in these stocks
  
        ** Says market's heavy discount on 
    Constellation Brands
      STZ.N  is undeserved, especially given core business is in
better shape than ever; adds that Modelo Especial brand can
continue its momentum of high-digit sales growth in the U.S.
  
    ** Believes Brown-Forman's  bfB.N  push to increase premium
brands in its portfolio is paying off, and has made it more
exposed to high-growth categories and geographies
    ** Brown-Forman's Jack Daniel's brand is well-positioned as
one of the few truly global iconic brands in alcohol - Bernstein
    ** Bernstein says that although Molson Coors Beverage
 TAP.N  gained from Anheuser-Busch InBev's  ABI.BR  Bud Light
controversy, its portfolio is still skewed towards domestic
premium and economy beers, which are struggling for sales in the
U.S., as against premium brands
    ** Boston Beer  SAM.N  is up against supply chain
inefficiences and sales decline in its Truly brands, says
Bernstein
 Company               Rating        New PT      Old PT
 Brown-Forman          Outperform    $73.20      $76.40
 Molson Coors          Market-Perfo  $68         $71
 Beverage              rm                        
 Constellation Brands  Outperform    $313        $315
 Boston Beer           Underperform  $280        $270
 
 (Reporting by Juveria Tabassum in Bengaluru)
 ((Juveria.Tabassum@thomsonreuters.com;))