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Molson Coors Beverage Company Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Simply Wall St
·4 mins read

Molson Coors Beverage Company (NYSE:TAP) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$2.8b, some 3.6% above estimates, and statutory earnings per share (EPS) coming in at US$1.58, 46% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Molson Coors Beverage after the latest results.

See our latest analysis for Molson Coors Beverage

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Molson Coors Beverage's 15 analysts is for revenues of US$10.2b in 2021, which would reflect a satisfactory 3.4% increase on its sales over the past 12 months. Per-share earnings are expected to leap 36% to US$3.66. In the lead-up to this report, the analysts had been modelling revenues of US$10.1b and earnings per share (EPS) of US$3.55 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$43.54, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Molson Coors Beverage analyst has a price target of US$62.00 per share, while the most pessimistic values it at US$32.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Molson Coors Beverage's past performance and to peers in the same industry. We would highlight that Molson Coors Beverage's revenue growth is expected to slow, with forecast 3.4% increase next year well below the historical 20%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Molson Coors Beverage.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Molson Coors Beverage's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$43.54, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Molson Coors Beverage analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Molson Coors Beverage that we have uncovered.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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    (Bloomberg) -- Four Chinese regulators including the central bank and banking watchdog called billionaire Jack Ma and Ant Group Co.’s top executives to a rare joint supervisory interview on Monday, underscoring rising government scrutiny of the company before its stock-market debut.Ant Chairman Eric Jing and Chief Executive Simon Hu were also at the meeting, which included the China Securities Regulatory Commission and State Administration of Foreign Exchange, according to a statement on Weibo. No further details were disclosed in the statement.The Chinese financial services giant, which spans payments, lending, asset management and insurance, was told it will be treated as a financial holding company and subject to regulations regarding capital and leverage similar to banks, according to people familiar with the matter. Senior executives will be under increased scrutiny, they said, asking not to be identified as the discussions are private.The central bank, banking regulator and CSRC weren’t able to comment outside regular business hours.“Ant Group will implement the meeting opinions in depth,” the company said in a statement. It will follow guidelines including stable innovation, an embrace of supervision and service to the real economy, it said.China has been tightening rules and imposing capital demands on the sprawling financial operations of conglomerates such as Ant in an attempt to curb risks to its $49 trillion financial industry. The Hangzhou-based company has been hit with a series of fresh rules in recent months, including capital and license requirements, a cap on loan rates and limits on its use of asset-backed securities to fund quick consumer loans.The latest move from regulators comes days before Ant’s trading debut following the world’s largest initial public offering, which is poised to raise $34.5 billion. It values the company at about $315 billion based of filings, more than JPMorgan Chase & Co. The sale vaults Ma’s fortune to $71.6 billion, topping the Walmart Inc. heirs.The IPO has attracted interest from some of the world’s biggest money managers, and is sparking a frenzy among individual investors in China. Institutional investors in Hong Kong are buying Ant shares at a 50% premium in the gray market, people familiar with the matter said on Monday, signaling it’s poised to soar when it starts trading on Nov. 5.Separately, China’s banking regulator proposed tougher rules for small online lenders late Monday, including imposing a cap on the amount of loans to be offered to individual borrowers as well as the leverage level.The draft rule could deal a major blow to Ant as it requires an online loan facilitator to provide at least 30% of the funding they jointly lend with banks. Ant said in its prospectus that currently about 2% of 1.7 trillion yuan ($254 billion) of loans it facilitated as of June were on its balance sheet. The company declined to comment.Ant is the parent of Alipay, a payments service spun out of Alibaba Group Holding Ltd.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.