After more than a 12% two day sell of I’m picking up a few shares of TAP at $43.95. The selloff is way overdone in my estimation. One reason is that S&P MAINTAINS BUY RECOMMENDATION ON SHARES OF MOLSON COORS after TAP announced adjusted Q3 EPS of $1.14 vs. $0.93. Beats the pro’s estimate by $0.14 on lower tax rate than had been forecasted.
Revenue was ahead of our view but expenses rose about 2% on higher brand investments, increased incentive compensation and costs related to new businesses. I am encouraged MillerCoors equity income exceeded analysts estimate and TAP pulled forward its synergy estimate to $270M from $260M.
One concern is that volume outlook looks weaker, particularly in Canada in light of reaction to price hikes. On lower tax rate.
S&P Analysts raise their ’09 EPS estimate by $0.46 to $3.86 AND keep our $52 target price.
Moving Average Convergence/Divergence (MACD) indicates a Bearish Trend.
Chart pattern indicates a Possible Trend Reversal.
Relative Strength is Bullish.
Up/Down volume pattern indicates that the stock is under Distribution.
The 50 day Moving Average is rising which is Bullish.
The 200 day Moving Average is rising which is Bullish.
Look for Support at 48.58
I project that TAP will outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement.
Interesting info: Molson Coors Brewing is a holding company. Through its subsidiaries, the company is engaged as a producer of beers. The company’s brands are sold primarily in the U.S., Canada and the U.K. under the brand names including: Coors Light®, Canadian®, Molson Dry®, Export ®, Creemore®, Rickard’s Red®, Rickard’s®, Carling®, Pilsner®, Amstel Light®, Heineken®, Murphy’s®, Miller Lite®, Miller Genuine Draft®, MGD 64®, Keystone
Light®, Blue Moon®, George Killian’s Irish Red®, C2®, Worthington’s®, Caffrey’s®, Kasteel Cru, Grolsch® brands, Sol®, Dos Equis Amber®, Zatec®, Magners Draught Cider®. As of Dec 28 2008, the company had six breweries in Canada, eight breweries in the U.S., as well as three breweries in the U.K.