Molson Coors Beverage Company TAP is expected to register top and bottom-line declines when it reports fourth-quarter 2024 earnings on Feb. 13, before market open. The Zacks Consensus Estimate for revenues is pegged at $2.7 billion, indicating a 3% decline from the prior-year reported figure. The consensus mark for earnings has been unchanged in the past 30 days at $1.13 per share, indicating a drop of 5% from the year-ago reported figure.

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For 2024, the Zacks Consensus Estimate for revenues is pegged at $11.6 billion, indicating a 0.9% slip from the prior-year reported figure. The consensus mark for 2024 earnings has been unchanged in the past 30 days at $5.79 per share, implying growth of 6.6% from the year-ago reported figure.

In the last reported quarter, this leading alcohol company delivered an earnings surprise of 9.1%. It has a trailing four-quarter average earnings surprise of 15.9%.

What the Zacks Model Unveils for TAP

Our proven model does not conclusively predict 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. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Molson Coors currently has a Zacks Rank #3 and an Earnings ESP of -0.15%.

Trends to Drive TAP’s Q4 Results

Molson Coors has demonstrated strong brand resilience and consistent growth across its markets, historically driving sales momentum. In the United States, core power brands like Coors Light, Miller Lite and Coors Banquet continue to perform well, with Coors Banquet achieving notable volume growth and expanding market share for 13 consecutive quarters. This momentum is expected to be reflected in the company’s fourth-quarter results.

TAP’s Acceleration Plan has supported market share gains through innovation and premiumization. Strategic investments in core brands and expansion efforts have likely contributed to top-line growth in the quarter under review. TAP’s revitalization plan, focused on streamlining operations and reinvesting in brands, has driven sustainable growth. Investments in iconic brands and the above-premium beer segment, alongside expansion into adjacent markets, are expected to have positively impacted its performance.

Molson Coors has enhanced digital capabilities across commercial, supply chain and workforce functions while expanding brewing and packaging operations in the U.K., driven by the success of its Madri brand.

Strong results in the EMEA and APAC segments and growth in Canada within the Americas segment remain promising, supported by favorable net pricing, premiumization and higher brand volumes. Meanwhile, cost-saving initiatives focused on streamlining operations and reducing overheads have likely supported financial stability, and reinvestment in key marketing and sales efforts. This has been contributing to margin expansion.

On the last reported quarter’s earnings call, Molson Coors reaffirmed its 2024 underlying EBT outlook, citing improved cost forecasts for packaging materials, transportation and administrative expenses. The company maintained its mid-single-digit EPS growth target. It now expects EPS to reach the higher end of the range, aided by an accelerated share repurchase program.

However, challenges persist, including inflationary pressures on raw materials and manufacturing costs, as well as an unfavorable product mix. Management previously indicated that inflationary impacts on COGS would continue into the third quarter, and softness in the broader beer industry remains concerning.

In response to macroeconomic pressures on the U.S. beer market and lower financial volumes during peak season, Molson Coors revised its 2024 sales forecast to a 1% decline on a constant-currency basis, down from the previously mentioned low-single-digit growth. The company also expects COGS per hectoliter to rise year over year due to ongoing inflation, contract brewing volume reductions and volume deleverage tied to the U.S. shipment trends.

TAP’s Valuation Picture

From a valuation perspective, Molson Coors offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 9.1X, which is below the five-year high of 15.57X and the Beverages - Alcohol industry’s average of 13.88X, the stock offers compelling value for investors seeking exposure to the sector.

The recent market movements show that TAP shares have lost 10.3% in the past three months compared with the industry's 15.5% decline.

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Stocks With the Favorable Combination

Here are three companies, which, per our model, have the right combination of elements to post an earnings beat this reporting cycle:

US Foods USFD has an Earnings ESP of +2.68% and a Zacks Rank #2 at present. USFD is anticipated to register top and bottom-line growth when it reports fourth-quarter 2024 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $9.5 billion, indicating year-over-year growth of 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for US Foods’ earnings has been unchanged at 80 cents per share in the past 30 days. The consensus estimate suggests 25% growth from the prior-year quarter’s reported figure. USFD has delivered a negative earnings surprise of 0.35%, on average, in the trailing four quarters.

Coca-Cola KO currently has an Earnings ESP of +0.30% and a Zacks Rank #3 at present. The company is expected to register bottom-line growth when it reports fourth-quarter 2024 numbers. The Zacks Consensus Estimate for KO’s quarterly revenues is pegged at $10.7 billion, which indicates a decline of 1.5% from the prior-year reported figure.

The Zacks Consensus Estimate for Coca-Cola’s quarterly earnings has moved down by a penny in the past 30 days to 51 cents per share. The estimate indicates 4.1% growth from the year-ago reported quarter. KO has delivered an earnings surprise of 3.9%, on average, in the trailing four quarters.

Hormel Foods HRL has an Earnings ESP of +0.66% and a Zacks Rank #3 at present. HRL is likely to register top and bottom-line decline when it releases fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.9 billion, which implies a dip of 2% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Hormel Foods’ bottom line has moved down by a penny to 38 cents in the past 30 days. The estimate indicates a 7.3% decline from the year-ago reported quarter. HRL has delivered an earnings surprise of 7.4%, on average, in the trailing four quarters.

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CocaCola Company (The) (KO) : Free Stock Analysis Report

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