Molson Coors Stock Up 11% in 3 Months: Buy Now or Hold Steady?

Shares of Molson Coors Beverage Company TAP have gained 10.8% in the past three months compared with the industry’s growth of 5.2%. The company’s focus on premiumization, innovation and brand revitalization has been a key driver of its success, allowing it to outperform the Consumer Staples sector’s 7.8% increase and the S&P 500’s 6.1% decline in the same period.

TAP Stock's Price Performance In The Past Three Months

This uptick has left many investors wondering if they missed out on a lucrative opportunity or if there is still potential for growth. Closing at $61.58 yesterday, TAP stock is inching toward its 52-week high of $69.18.

Technical indicators are supportive of Molson Coors’ strong performance. The stock is trading above its 50- and 200-day simple moving averages of $58.02 and $55.42, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors’ confidence in Molson Coors’ financial health and growth prospects.

TAP Stock Above the 50 and 200-Day SMA

Molson Coors Drives Growth Through Premiumization & Innovation

Molson Coors, a legacy brewer with a rich history in the beer industry, remains committed to growing its market share through innovation and premiumization. To accelerate portfolio premiumization, the company has been aggressively growing its above-premium portfolio for the past few years. The company has been prioritizing the stabilization of some of its larger above-premium brands in the United States while exploring significant growth opportunities for key brands. Combining these efforts, the company remains confident in its ability to achieve its global premiumization objectives, leveraging strong brand positioning and innovation.

Molson Coors' core brands, including Coors Light, Miller Lite and Coors Banquet, performed well in the United States, maintaining strong market share gains. Coors Banquet continued its impressive growth, solidifying its position as one of the company’s top global brands. In Canada, Coors Light remained the leading light beer, while the Molson family of brands saw sustained share growth.

In the U.K., Carling retained its strong brand equity, while premiumization efforts in EMEA and APAC drove significant success, led by Madrí and the re-launch of Caraiman in Romania. With a growing focus on above-premium beverages, Molson Coors is reshaping its global portfolio and implementing targeted expansion plans in the United States.

The company is on track with its revitalization plan, which is focused on achieving sustainable top-line growth by streamlining the organization and reinvesting resources into its brands and capabilities. TAP intends to invest in iconic brands and growth opportunities in the above-premium beer space; expand in adjacencies and beyond beer, without hampering the support for its existing large brands; and create digital competencies for commercial functions, supply-chain-related system capabilities and employees.

What to Expect From TAP in 2025?

TAP’s strategic initiatives have played a key role in driving its growth. The company expects its sales to grow in the low single digits in 2025, with underlying earnings per share (EPS) rising in the high single digits. It also expects operating profit to grow in the mid-single digits, with planned price increases of 1-2% in North America and price adjustments in other markets based on inflation. For 2025, the company expects margin expansion from mixed gains from lower contract brewing and higher premiumization, moderating inflation for input costs, better productivity and cost savings.

The company had retained a major portion of its sizable share gains versus 2023. It has accomplished solid growth in Canada in all the price segments of the portfolio. TAP has been focused on premiumization off a high base in its EMEA and APAC business. It had terminated low-margin contract brewing agreements, exited small non-profitable businesses and invested in significant areas to deliver growth.

Molson Coors had commenced a new multiyear project in the U.K. to boost its brewing and packaging capacity, driven by strength in Madri. In addition, solid results in the EMEA&APAC segment and strength in Canada within the Americas segment show promise. In these regions, the company is benefiting from favorable net pricing, premiumization and higher brand volumes.

TAP’s Investment Rationale

Molson Coors’ strategic focus on premiumization, strong brand positioning and expansion into non-alcoholic beverages positions it for sustained growth. With solid financial projections for 2025, continued pricing power and operational improvements, TAP presents a compelling investment opportunity. Currently, Molson Coors carries a Zacks Rank #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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