Wells Fargo analysts say investors have failed to ask a key question: What if Molson Coors' gains go away?
As Bud Light sales drop amid a conservative-led boycott, beer drinkers have flocked to rival Molson Coors Beverage Co. for light-beer alternatives. But as the retreat from Bud reshapes the beer market, Wells Fargo analysts say investors have failed to ask a key question: What if Molson’s gains go away?
Shares of Bud Light’s parent company, Anheuser-Busch InBev BUD , have faltered since the boycott began more than two months ago, after Bud Light’s partnership with trans influencer Dylan Mulvaney drew anti-trans outrage and complaints that the brand had “gone woke.” Shares of Molson Coors TAP , in turn, have rallied as Bud Light gave up sales to other brands.
Still, they said that the beer industry’s difficulties are ongoing. Sales volumes — a measure of the amount of beer sold — are weak amid competition from other kinds of drinks, and the businesses that make and sell beer are sitting on a mountain of unsold brew. With the July 4th and Labor Day holidays approaching, bigger discounts and heftier competition in the beer aisle are certainly a possibility.
The analysts raised their price target on Molson Coors to $64 from $60, but they maintained their version of a sell rating on the stock.
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