A month has gone by since the last earnings report for Molson Coors Brewing (TAP Quick QuoteTAP - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Molson Coors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Molson Coors Q4 Earnings & Sales Beat Estimates

Molson Coors has posted fourth-quarter 2023 results, wherein the bottom and top lines surpassed their respective Zacks Consensus Estimate. The top line also improved year over year.

The company’s adjusted earnings of $1.19 per share declined 8.5% year over year but surpassed the Zacks Consensus Estimate of $1.12.

Net sales grew 6.1% to $2,790.8 million and beat the Zacks Consensus Estimate of $2,775 million. On a constant-currency basis, net sales rose 5%, driven by a positive price and sales mix, increased financial volumes and the positive impacts of foreign currency.

Net sales per hectoliter increased 5.3% on a reported basis and 1.1% on a constant-currency basis, driven by a favorable sales and price mix.

Molson Coors’ worldwide brand volumes rose 4.3% to 19.8 million, driven by strength in America, partially offset by the sluggishness in EMEA and APAC. Financial volumes rose 0.8% year over year to 19.5 million hectoliters due to higher volumes in the Americas, partly offset by increased EMEA & APAC volumes.

The segment’s underlying EBT advanced 5.2% to $345.8 million on a reported basis. On a constant-currency basis, EBT jumped 2.1% year over year due to higher net pricing and rising financial volumes, somewhat offset by cost inflation related to materials and manufacturing expenses, as well as higher MG&A expenses.

Segmental Information

Molson Coors operates under the following geographical segments.

Americas: Net sales in the segment increased 4.7% year over year to $2,231.1 million on a reported basis and flat on a constant-currency basis, driven by a positive price and sales mix, as well as higher financial volume. Financial volumes rose 2.2% year over year, driven by an increase in U.S. brand volumes stemming from higher volumes in the core brands, partly offset by U.S. shipment timing and lower contract brewing volume.

Brand volume for the segment increased 6.7% year over year on an 8.5% rise in the United States, owing to growth in the core brands, with Coors Light, Miller Lite and Coors Banquet each rising double digits. Canada brand volumes grew 0.7% on higher--than-premium brands. Latin America volumes fell 5% year over year mainly due to tough economic conditions across major markets.

Net sales per hectoliter rose 2.5% year over year due to a favorable sales and price mix, and higher pricing. Underlying EBT improved 5% on a constant-currency basis to $363 million. The increase can be attributed to higher net pricing, rising financial volumes and lower logistics expenses, offset by cost inflation on materials and higher MG&A expenses.

EMEA & APAC: The segment’s net sales (on a reported basis) rose 12.6% year over year to $566.6 million and improved 6% on a constant-currency basis, driven by a favorable price and sales mix, as well as favorable currency, partly offset by a decline in financial volume. Net sales per hectoliter for the segment advanced 16% year over year, resulting from a favorable sales mix, as well as higher pricing.

The segment’s financial volumes fell 3%, while the brand volume decreased 2.2% due to lower consumption in the UK and declines in Central and Eastern Europe, stemming from inflationary pressures.

The segment’s underlying EBT decreased 52.7% to $15.3 million on a constant-currency basis, driven by cost inflation on materials and logistics expenses, higher MG&A coupled with lower financial volumes, partly offset by higher net pricing and a favorable sales mix.

Other Financial Updates

Molson Coors ended the fourth quarter with cash and cash equivalents of $868.9 million. As of Dec 31, 2023, the company had a total debt of $6,223.9 million, resulting in a net debt of $5,355 million. During 2023, the company provided $2,079 million in cash by operating activities, resulting in an underlying free cash flow of $1,420 million. For 2023, capital expenditure is likely to be $750 million, plus or minus 5%.

In 2023, the company declared and paid out cash dividends of 41 cents per share, with the CAD equivalent totaling $2.19 per share. Also, TAP repurchased 3,454,694 shares for $211 million in the above-mentioned period.

Outlook

Management issued guidance for 2024. Net sales are projected to grow in the low single digits year over year on a constant-currency basis. Underlying EBT is likely to grow mid-single digits year over year on a constant-currency basis. Underlying earnings per share are likely to rise mid-single digits compared with 2023.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Molson Coors has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Molson Coors has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.