Boston Beer (NYSE:SAM) made some new inroads as a report emerged from Guggenheim with plenty of positive points to note. The company is down 5.77% over the last five days of trading, but Guggenheim has quite a bit of faith in its recovery and further expansion. Guggenheim's bright outlook on the company is far from universal, however, as the consensus projections from financial analysts call for caution.
Guggenheim's Research Report Makes Boston Beer a Top Idea
Guggenheim, via analyst Laurent Grandet, noted that this was a great time for investors to buy in on Boston Beer, especially thanks to that previously mentioned slump. A “buy the dip” strategy can now kick in, as the company itself is solid underneath.
Essentially, Grandet noted, the economic data in recent days may be a bit unsettled due in large part to the still-ongoing reopening of the United States, but Boston Beer has a solid growth story lurking in the recent economic developments. Grandet notes that Boston Beer shares have been on a downward track—the company has lost about 25% of its value just since April 20—but with bars and restaurants reopening to full capacity without the need to wear masks just to walk in the door, that's likely to change.
Additionally, Boston Beer hasn't been resting on its laurels. A new product from the company, Truly seltzer, has some great potential for growth as well. Laurent noted that recently-released numbers on alcohol sales that proved unusually light were actually covering up the impact of the new brand on the market. Hard seltzer sales have been particularly in decline, reports note, but Laurent notes that Truly has taken the decline overall as an opportunity to seize more market share. This is a point further supported by recent word from Evercore ISI, who pointed out that Truly—and by extension Boston Beer—has been benefiting from innovation in the hard seltzer field.
This led Grandet to not only declare Boston Beer a “buy”, reiterating his earlier rating, but also to appoint Boston Beer to his list of “best ideas” for investors.
What Are the Analysts Saying About Boston Beer Co Stock?
While Grandet and Guggenheim are wildly in support of Boston Beer, the story from the rest of the financial analyst community is much less enthusiastic. Our latest research finds that Boston Beer Co stock is rated a “hold”, and has been rated as such for more than two years now.
A year ago, the company had six “buy” ratings, five “hold” and one “sell” to its credit. Six months ago, that shifted to four “buy”, five “hold” and one “sell”. Currently, we're at six “buy”, six “hold” and one “sell”, which does suggest an upward trend potentially in the making.
The Boston Beer price target, however, is in a fairly broad range. The current consensus sits at $1,230 per share, with a high of $1,540 and a low of $625. With Boston Beer shares currently selling at $982.36 as of this writing, there's quite a bit of upside potential her based on these targets.
Recent movement aside from Guggenheim has been light and mixed overall. Last week, Citigroup lowered its price target on the company to $1,145 from its previous $1,395. When Jim Cramer asked Citigroup analyst Wendy Nicholson about the price target cut, Nicholson noted that investors were expecting more out of the Truly line to offset issues of comps “to a more significant degree than they apparently have.” Nicholson also expressed concern about issues of Nielsen data, which have been reflecting slow-downs of late.
Three weeks prior, however, Sanford C. Bernstein initiated coverage on the company, calling it an “outperform” with a $1,340 price target. Evercore came out in favor of Truly's chances in hard seltzer, as noted previously, and gave the company an extra surge with a boosted price target, going from $1,300 to a near-high of $1,500. Meanwhile, Bill Sarubbi released some chart data on Boston Beer's daily cycles, noting that current cycle data suggested a buying opportunity in the making.
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