Boston Beer Company (SAM) PT Lowered to $275 at Morgan Stanley

Morgan Stanley analyst Eric Serotta lowered the price target on Boston Beer Company (NYSE: SAM) to $275.00 (from $285.00) while maintaining a Underweight rating.

The analyst comments "We expect a negative reaction following SAM's 4Q results and weaker than expected FY24 EPS guidance that was~20% below consensus at its midpoint, with gross margin recovery substantially lower than expected due to third-party production shortfall fees and pre-payment expenses. While depletions trends have modestly improved from -2% in 3Q to -1% in 4Q on a comparable weeks basis, depletions are down -2% YTD, and guidance for FY24 guidance for shipments and depletions ranging from a -LSD decline to +LSD growth reflects the wide scope of potential outcomes. With Twisted Tea volumes in scanner data slowing from the mid 30%s last summer to the low 20%s in 4Q and high teens YTD (with YTD likely exacerbated by poor weather and increased Dry January participation), and Truly likely to lose share of the declining malt-based hard seltzer category again this year, our base case is for a -0.5% to -1% shipment and depletion decline in FY24. Post 4Q, we are lowering FY24/25 EPS by 18%/15%, lowering our PT from $285 to $275, and maintaining our UW rating."

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