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Here's Why Boston Beer (SAM) Stock Surged in the Past Month
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The Boston Beer Co. Inc. (SAM - Free Report) stock has been a standout performer in the past month driven by robust third-quarter 2017 results, enhanced margins, growth strategies, and efforts to boost market share.
This largest craft brewer in the United States has witnessed its shares advance 5.4% in the past month, against the industry’s decline of 0.5%. Currently, the industry is placed at the top 40% of the Zacks classified industries (105 out of 265). In fact, the company’s shares have also outperformed the broader Consumer Staples sector’s gain of 3.7%, which is placed at the bottom 44% (9 out of 16) of the Zacks classified sectors.
These factors have aided the company to retain the Zacks Rank #1 (Strong Buy), while carrying a VGM Score of A. That said, let’s find out more about the factors aiding this Boston, MA-based company’s performance.
Robust Earnings Trend & Outlook
Boston Beer posted solid third-quarter 2017 with both earnings and sales surpassing estimates. While this was the company’s fourth-straight earnings beat, sales topped estimates for the second-consecutive quarter. Earnings gained from enhanced gross margin, lower operating costs owing to cost saving initiatives and lower tax rate. Moreover, the company raised the lower-end of its previously stated earnings guidance range. It now estimates adjusted earnings per share in the range of $5.60-$6.20 compared with the prior guidance of $5.00-$6.20.
Boston Beer Company, Inc. (The) Price, Consensus and EPS Surprise
Boston Beer is the largest premium craft brewer in the United States, and commands a strong portfolio of globally recognized brands. Apart from selling alcoholic beverages in the United States, the company distributes beverages in Canada, Europe, Israel, Caribbean, Pacific Rim, Mexico, as well as Central and South America through a strong network of wholesale distributors. We anticipate the company’s continued focus on pricing, product innovation and brand development to boost operational performance and position in the market.
Strategic Initiatives
Management remains committed to a three point growth plan focused on revival of its Samuel Adams and Angry Orchard brands, cost saving initiatives and long-term innovation. One, the company is keen on the revival of the Samuel Adams and Angry Orchard brands through its packaging, innovation, promotion and brand communication initiatives. Moving forward, the company plans to launch new media campaigns for these brands. These innovations include Samuel Adams Sam '76, Samuel Adams New England IPA and Angry Orchard Rose, which are likely to be launched nationally in first-quarter 2018. Further, it targets maintaining momentum for the Twisted Tea brand.
Two, the company has accelerated focus on cost savings and efficiency projects, while ensuring that these savings are directed for further brand development. In this regard, the company has adjusted the organization to the new volume environment, while at the same time retained its capability to innovate and return to growth. This is reflected in the improved gross margin and lower operating expenses in third-quarter 2017. Based on this early success, it continues to anticipate improving gross margin by one percentage point every year through 2019.
The company’s third priority is long-term innovation, wherein its focus currently hovers around maintaining the leadership of its Truly Spiked & Sparkling brand and ensuring it reaches full potential.
Brown-Forman has jumped nearly 13.3% in the last three months. Moreover, the company has delivered an average positive earnings surprise of 2.7% in the trailing four quarters.
Constellation Brands has gained nearly 8.7% in three months. Moreover, it has a long-term earnings growth rate of 18.4%.
Craft Brew Alliance has surged 12.3% in the last three months. Further, the company has a VGM Score of A.
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Here's Why Boston Beer (SAM) Stock Surged in the Past Month
The Boston Beer Co. Inc. (SAM - Free Report) stock has been a standout performer in the past month driven by robust third-quarter 2017 results, enhanced margins, growth strategies, and efforts to boost market share.
This largest craft brewer in the United States has witnessed its shares advance 5.4% in the past month, against the industry’s decline of 0.5%. Currently, the industry is placed at the top 40% of the Zacks classified industries (105 out of 265). In fact, the company’s shares have also outperformed the broader Consumer Staples sector’s gain of 3.7%, which is placed at the bottom 44% (9 out of 16) of the Zacks classified sectors.
These factors have aided the company to retain the Zacks Rank #1 (Strong Buy), while carrying a VGM Score of A. That said, let’s find out more about the factors aiding this Boston, MA-based company’s performance.
Robust Earnings Trend & Outlook
Boston Beer posted solid third-quarter 2017 with both earnings and sales surpassing estimates. While this was the company’s fourth-straight earnings beat, sales topped estimates for the second-consecutive quarter. Earnings gained from enhanced gross margin, lower operating costs owing to cost saving initiatives and lower tax rate. Moreover, the company raised the lower-end of its previously stated earnings guidance range. It now estimates adjusted earnings per share in the range of $5.60-$6.20 compared with the prior guidance of $5.00-$6.20.
Boston Beer Company, Inc. (The) Price, Consensus and EPS Surprise
Boston Beer Company, Inc. (The) Price, Consensus and EPS Surprise | Boston Beer Company, Inc. (The) Quote
Strong Brands Portfolio a Key Growth Driver
Boston Beer is the largest premium craft brewer in the United States, and commands a strong portfolio of globally recognized brands. Apart from selling alcoholic beverages in the United States, the company distributes beverages in Canada, Europe, Israel, Caribbean, Pacific Rim, Mexico, as well as Central and South America through a strong network of wholesale distributors. We anticipate the company’s continued focus on pricing, product innovation and brand development to boost operational performance and position in the market.
Strategic Initiatives
Management remains committed to a three point growth plan focused on revival of its Samuel Adams and Angry Orchard brands, cost saving initiatives and long-term innovation. One, the company is keen on the revival of the Samuel Adams and Angry Orchard brands through its packaging, innovation, promotion and brand communication initiatives. Moving forward, the company plans to launch new media campaigns for these brands. These innovations include Samuel Adams Sam '76, Samuel Adams New England IPA and Angry Orchard Rose, which are likely to be launched nationally in first-quarter 2018. Further, it targets maintaining momentum for the Twisted Tea brand.
Two, the company has accelerated focus on cost savings and efficiency projects, while ensuring that these savings are directed for further brand development. In this regard, the company has adjusted the organization to the new volume environment, while at the same time retained its capability to innovate and return to growth. This is reflected in the improved gross margin and lower operating expenses in third-quarter 2017. Based on this early success, it continues to anticipate improving gross margin by one percentage point every year through 2019.
The company’s third priority is long-term innovation, wherein its focus currently hovers around maintaining the leadership of its Truly Spiked & Sparkling brand and ensuring it reaches full potential.
Looking for More? Check these 3 Trending Stocks
Other top-ranked stocks in the same industry are Brown-Forman Corp. (BF.B - Free Report) , Constellation Brands Inc. (STZ - Free Report) and Craft Brew Alliance, Inc. , each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brown-Forman has jumped nearly 13.3% in the last three months. Moreover, the company has delivered an average positive earnings surprise of 2.7% in the trailing four quarters.
Constellation Brands has gained nearly 8.7% in three months. Moreover, it has a long-term earnings growth rate of 18.4%.
Craft Brew Alliance has surged 12.3% in the last three months. Further, the company has a VGM Score of A.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>