Boston Beer Falls After Piper Sandler Downgrade As Hard Mtn Dew Growth Slows By Investing.com
Investing.com — Piper Sandler downgraded Boston Beer Company Inc (NYSE: ) to “neutral” from “overweight” due to slower-than-expected growth in Hard Mtn Dew and Twisted Tea, two of the brewer’s key revenue drivers.
Shares of Boston Beer fell 1.2% in early trading.
The brokerage lowered its price target for SAM to $275 from $370 and cut its earnings estimates for 2025 and 2026, reflecting a moderate forecast for innovation-driven sales.
While Hard Mtn Dew continues to expand within Boston Beer’s distribution network, Piper Sandler said it will take longer than expected to achieve significant success.
Twisted Tea, which accounts for about half of Boston Beer’s revenue, also saw sales growth slow to 5.8% in the 12 weeks ended December 29, 2024, from 12% during the summer months.
However, Piper Sandler highlighted the potential of Sun Cruiser, a tea vodka, to drive premiumization in 2025, although competition from Surfside in the mid-Atlantic region poses challenges.
Despite concerns about sales growth, the brokerage expects margin improvements to support earnings over the medium term, aided by reduced shortfalls and early repayment charges.
