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Boston Beer (SAM) Soars 3%: Is Further Upside Left in the Stock?

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Boston Beer SAM shares soared 3% in the last trading session to close at $1,283.90. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 15.7% gain over the past four weeks.

Shares of Boston Beer got a boost following the company’s better-than-expected sales and earnings results for first-quarter 2021. Additionally, the top and bottom lines improved on a year-over-year basis, backed by strong shipment and depletion trends. Moreover, the company raised its earnings view for 2021, based on positive first-quarter and robust current trends.

The company posted quarterly earnings of $5.26 per share, which includes tax benefit of $0.69 per share. This showed a meaningful improvement from earnings of $1.49 reported in the year-ago period. Net revenues advanced 64.9% year over year to $545.1 million and surpassed the Zacks Consensus Estimate of $468.7 million.

For 2021, Boston Beer now envisions adjusted earnings in the band of $22-$26 per share, excluding the impacts of ASU 2016-09. The company had earlier guided earnings between $20 and $24 per share.

Price and Consensus

Price Consensus Chart for SAM
Price Consensus Chart for SAM

This brewer is expected to post quarterly earnings of $6.56 per share in its upcoming report, which represents a year-over-year change of +39.9%. Revenues are expected to be $645.04 million, up 42.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Boston Beer, the consensus EPS estimate for the quarter has been revised 2.5% higher over the last seven days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate 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 >>>>


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