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Molson Coors (TAP) to Report Q4 Earnings: Is a Beat in Store?

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Zacks Equity Research
·4 min read
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Molson Coors Beverage Company TAP is expected to register top and bottom-line declines when it reports fourth-quarter 2020 numbers on Feb 11, before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at 76 cents, suggesting a 25.5% decline from the year-ago reported figure. The consensus mark has moved down 2.6% in the past 30 days.

For fourth-quarter revenues, the consensus mark is pegged at $2.41 billion, suggesting a 3.2% decline from the prior-year reported figure.

In the last reported quarter, the leading alcohol company delivered an earnings surprise of 55.8%. Moreover, it delivered an earnings surprise of 61.3%, on average, over the trailing four quarters.

Molson Coors Beverage Company Price and EPS Surprise

Molson Coors Beverage Company Price and EPS Surprise
Molson Coors Beverage Company Price and EPS Surprise

Molson Coors Beverage Company price-eps-surprise | Molson Coors Beverage Company Quote

Key Factors to Note

Despite the impacts of the coronavirus outbreak on top-line growth, Molson Coors has been benefiting from favorable net pricing, cost savings, and lower marketing, general and administrative expenses. Its diligent cost-saving efforts aided the bottom line in the third quarter. The company’s efforts to prioritize, shift and significantly reduce marketing spend by shifting to media platforms with greater audiences in the current situation have led to cost deleverage, which is expected to have continued in the fourth quarter.

Additionally, Molson Coors’ focus on premiumization has been aiding its bottom-line performance. In fact, it remains committed to growing its market share through innovation and premiumization. Moreover, its innovation plans have been focused on introducing flavors and variations for customers. The recently launched brands, including Topo Chico Hard Seltzer, Vizzy Hard Seltzer, Blue Moon LightSky, Saint Archer Gold and Movo canned wine spritzers, are expected to have contributed meaningfully to the fourth-quarter performance.

However, Molson Coors is expected to have witnessed a slowdown in volumes due to the pandemic-led closure of on-premise channels, which has been a major contributor to sales. Moreover, unfavorable channel mix across major markets and a decline in financial volume due to on-premise restrictions are expected to have partly hurt sales in the fourth quarter.

On the last reported quarter’s earnings call, management expected marketing expenses to increase in the fourth quarter, driven by efforts to strengthen co-brand and support key innovations like Blue Moon Light Sky, Vizzy and Coors Slice, in sync with additional supply coming online.

Zacks Model

Our proven model conclusively predicts an earnings beat for Molson Coors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Molson Coors has a Zacks Rank #3 and an Earnings ESP of +3.28%.

Other Stocks With Favorable Combination

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:

Monster Beverage Corporation MNST presently has an Earnings ESP of +21.81% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

PepsiCo Inc. PEP currently has an Earnings ESP of +0.59% and a Zacks Rank #3.

Tyson Foods, Inc. TSN has an Earnings ESP of +0.16% and a Zacks Rank #3 at present.

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