Molson Coors Beverage Company (TAP): A Bull Case Theory

We came across a bullish thesis on Molson Coors Beverage Company on Waterboy Stocks’s Substack. In this article, we will summarize the bulls’ thesis on TAP. Molson Coors Beverage Company's share was trading at $47.74 as of January 28th. TAP’s trailing and forward P/E were 9.11 and 8.47 respectively according to Yahoo Finance.

Molson Coors Beverage Company manufactures, markets, and sells beer and other malt beverage products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. TAP remains a dominant force in the U.S. beer market despite slower growth and industry headwinds. Last year, TAP produced roughly 80 million hectoliters, translating to billions of servings, highlighting the enduring demand for its legacy brands like Coors Light, Miller Lite, Coors Banquet, and Miller High Life.

While premium competitors such as STZ’s Modelo, Corona, and Michelob Ultra have gained share, TAP’s core portfolio still accounted for 15.2% of U.S. beer volume in H1 2025, up from 13.4% three years ago, with gross margins steady in the high 30s and returns on net tangible equity around 30%. The company’s free cash flow remains strong, with $1.2 billion last year and a five-year average of $1.1 billion, while debt has been significantly reduced from $12 billion in 2016 to $6.5 billion, lowering net debt/EBITDA to 2.5x.

TAP has aggressively returned capital to shareholders, repurchasing shares from 200 million to 185 million in under two years, utilizing 55% of a five-year $2 billion buyback program, and paying a 4.26% dividend. Management turnover brings new CEO Rahul Goyal, a 24-year TAP veteran, signaling continuity in strategic execution and shareholder alignment.

With forward free cash flow of $1.3 billion and a market cap of $8.3 billion, TAP trades at just 6.4x FCF, offering a value opportunity reminiscent of high-yield tobacco peers like British American Tobacco, combining resilient cash flows, strong brands, and disciplined capital allocation. Despite market skepticism over growth and shifting consumption trends, TAP’s scale, margins, and shareholder-friendly policies make it a compelling long-term investment.

Previously, we covered a bullish thesis on Molson Coors Beverage Company (TAP) by Tyler Moody in September 2024, which highlighted TAP’s mid-cap stability, broad beverage portfolio, modest undervaluation, dividend yield, and share buybacks. TAP’s stock has depreciated by about 13.73% since then due to profitability concerns. Waterboy Stocks shares a similar view but emphasizes TAP’s strong free cash flow, declining debt, and accelerating buybacks.

Molson Coors Beverage Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held TAP at the end of the third quarter which was 37 in the previous quarter. While we acknowledge the risk and potential of TAP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TAP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.