Boston Beer (SAM) Moves 5.4% Higher: Will This Strength Last?
Boston Beer (SAM) shares ended the last trading session 5.4% higher at $334.93. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.5% gain over the past four weeks.
Boston Beer’s stock rally is a result of upgrades by some analysts due to the recent boycott of rival Anheuser-Busch InBev’s Bud Light and other brands by some consumers. Analysts believe that the fall in demand for Anheuser-Busch InBev’s Bud Light could be beneficial for Boston Beer, with sales for the Truly brand picking up. Analysts cite an improvement in Boston Beer’s market share in May due to the incident, aiding the company’s depletions.
Moreover, SAM's focus on innovation to revive the Truly brand and expand Twisted Tea’s potential bodes well. Continued focus on pricing, and growth of non-beer categories alongside brand development bodes well.
This brewer is expected to post quarterly earnings of $3.29 per share in its upcoming report, which represents a year-over-year change of -23.7%. Revenues are expected to be $595.17 million, down 3.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Boston Beer, the consensus EPS estimate for the quarter has been revised 1.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on SAM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Boston Beer belongs to the Zacks Beverages - Alcohol industry. Another stock from the same industry, Constellation Brands (STZ), closed the last trading session 1.8% higher at $237.06. Over the past month, STZ has returned 1.2%.
Constellation Brands' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.80. Compared to the company's year-ago EPS, this represents a change of +5.3%. Constellation Brands currently boasts a Zacks Rank of #3 (Hold).
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