Is it Time to Crack Open Molson Coors Brewing Company (TAP)?

Updated on

By Carly Forster 

With summer here, one of the classic things to do is hang around a barbeque and crack open an ice-cold beer.

Molson Coors in the News

Molson Coors Brewing Company (NYSE:TAP) is known for crafting popular beers, such as Coors Light and Molson Canadian. The brewing company reached a record 52-week high on Monday, June 9 to $71.39 and has increased 20% this year. They have been climbing as international sales and cost cuts have attributed to their profit growth, making them come ahead of competing companies.

A Financial Experts Opinion

On June 11, Merrill Lynch analyst Bryan Spillane upgraded his rating for Molson Coors Brewing Company (NYSE:TAP) from underperform to BUY and raised his price target from $55.00 to $80.00. He noted, “We are raising our rating on TAP from Underperform to Buy based on potential for improving fundamentals and strategic actions.” Since Spillane’s recommendation, the stocks price has gone from $70.71 to $71.08.

Spillane has a history of recommending food and beverage companies like General Mills, Inc. (NYSE:GIS) and The Coca-Cola Company (NYSE:KO). His recommendations have helped him earn a +14.0% average return on all stocks and a 67% success rate.

On June 21, 2013, Spillane reiterated a BUY rating for General Mills, Inc. (NYSE:GIS)  with a price target of $50. He explained, “We are forecasting F4Q13 EPS of $0.55 and FY13 EPS of $2.70, which is $0.01 above the EPS guidance range (management recently preannounced and raised its EPS guidance from $2.66-$2.68 to $2.68-2.69.”  Since then, the price of General Mills has gone from $47.14 to $55.16, earning Spillane a +11.4% average return on the stock.

In addition to his recommendation of the food company, on March 14, 2013, Spillane reiterated a BUY rating on The Coca-Cola Company (NYSE:KO) with a $41 price target. He reasoned, “The continuity of strategy and management may be perceived as “boring” by some investors relative to the myriad of turnaround stories in the food and beverage peer group, however re-accelerating sales and profit growth will enable KO to recapture investor attention.” Since then, the price of Coca-Cola has gone up from $37.90 to $41.07, earning Spillane a +0.7% average return on the stock.

However, Spillane hasn’t always been so lucky with his recommendations. On February 7 of this year he reiterated a neutral rating for Keurig Green Mountain Inc (NASDAQ:GMCR) and raised his price target from $87.00 to $108.00. He noted, “While there are clearly hurdles to driving consumer adoption we believe Keurig Cold can help soft drink companies expand usage occasions. U.S. non-alcohol ready to drink beverage market is $117bn at retail and we estimate an $11b profit pool. This provides ample opportunity for GMCR.” This recommendation earned Spillane a -13.8% average return on the stock.

Will you be able to trust Spillane on his latest recommendations based on his past performance history?

Carly Forster writes about stock market news. She can be reached at [email protected]

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