One beer maker's sales are fizzing up as another's go flat, prompting Wall Street to take notice.
Bank of America upgraded its rating on Coors maker Molson Coors (TAP) to Neutral from Underperform on Tuesday. Analysts raised their price target on the stock to $68 from $54.
"Our rating change is based on our view that recent U.S. market share gains related to the Bud Light boycott have lasted long enough to positively impact sales and earnings," BofA analyst Bryan Spillane wrote in a client note. "In addition, Molson Coors has made progress on elements of its revitalization plan (announced in 2019), which has resulted in a stronger balance sheet, ... more reliable profit growth and, in our view, greater capability to service the sudden demand surge in a way that may not have been possible four years ago."
Spillane cited Nielsen's sales data as a prime reason for his change of heart about Molson Coors.
Coors sales have accelerated from 6.3% growth over the latest 52 weeks to about 13% growth over the past two months, Spillane said in analyzing Nielsen's data. The gains have been fueled by demand for Coors Light and Miller Lite.
"It's difficult to determine the duration of the boycott, but it has already lasted longer than industry executives anticipated and appears likely to impact the July 4th holiday," Spillane added. "Molson Coors appears able to service the demand spike due in part to supply chain improvement (part of the revitalization plan) and learnings from COVID supply chain stress."
Molson Coors stock popped 2% to $65.11 on Tuesday.
The opposite story is playing out at Molson Coors' rival Anheuser-Busch InBev (BUD).
Bud Light volumes tanked 27.8% year over year for the week ending May 23, per Nielsen data. That's an improved pace than the year-on-year drop of 29.5% for the period ending May 20.
But it's still ugly.
The declines started after transgender influencer Dylan Mulvaney created an Instagram post during the March Madness basketball tournament endorsing the light beer.
Following the post on April 1, ABInBev saw Bud Light sales trend lower throughout April and into May. The declines appeared to accelerate following an April 3 video from country musician Kid Rock, which spurred a wider boycott by many on the right.
Alissa Heinerscheid — Bud Light's vice president of marketing — left the company in late April amid the controversy.
"Bud Light remains the #1 brand in the U.S. nationally in volume and dollar sales," an ABInBev spokesperson told Yahoo Finance via email when reached for comment.
BofA's Spillane says Molson Coors has more going for it fundamentally besides market share gains from a stumbling Bud Light.
He explained that Molson Coors has restructured its business to pull out $150 million in cost savings while also improving marketing for Coors Light.
The company has also moved beyond beer to gain new customers.
"The partnership with Coca-Cola to create Topo Chico Hard Seltzer, Simply Spiked, distribution expansion deal with Yuengling, restart growth of Blue Moon are among the activities Molson Coors has undertaken to create new revenue streams that don't compete directly with its core," Spillane noted.