Analyst Downgrade: Bank of America Turns Cautious on Molson Coors
Bank of America has downgraded Molson Coors Beverage (TAP) from “buy” to “neutral,” slashing its price target to $50—the lowest among major analysts. The move reflects growing concerns about the U.S. beer industry’s persistent decline and the company’s ability to grow in a challenging market.
Key Reasons for the Downgrade
| Factor | Analyst Viewpoint |
|---|---|
| Industry Decline | U.S. beer consumption forecast to fall 4% in 2025, worse than previous estimates |
| Competitive Pressure | Beer is losing ground to spirits (premixed drinks) and energy drinks |
| Growth Prospects | Coors now seen as similar to slow-growth packaged food peers |
| Stock Performance | Shares down over 17% year-to-date, trading around $47 |
| Price Targets | Bank of America: $50; Analyst average: $62 (Visible Alpha) |
Bank of America’s research now predicts beer volumes will drop below early 1990s levels, a steeper fall than the previously expected 1% decline. The analysts use a food chain analogy: beer is the “sheep,” losing out to “wolves” (spirits with ready-to-drink cocktails) and “parasites” (energy drinks using beer’s distribution network).
Industry Context: Beer’s Shrinking Share
The U.S. beer sector continues to lose customers and relevance, with analysts noting that beer is “ceding customers and attention” to other beverage categories. Molson Coors is now viewed more like a traditional packaged food company, facing similar slow-growth dynamics.
Expert Opinion: Should Investors Avoid Molson Coors?
“The downgrade is justified given the accelerating decline in U.S. beer consumption and fierce competition from spirits and energy drinks. Unless Molson Coors can innovate or diversify, growth will likely remain muted. For investors, caution is warranted—especially with better opportunities in faster-growing beverage segments.”
What’s your perspective? Is this the end of the road for big beer, or can Molson Coors adapt? Share your thoughts in the comments below!
