Today, analysts at Zacks issued a fresh buy on Boston Beer (NYSE: SAM), makers of Truly hard seltzer, and went further in their analysis of the financial prospects of the category and specifically of several publicly traded companies.

Hard seltzer is still in its early days, according to Benjamin Rains at Zacks Investment Research on December 18, 2020. Rains went on to cover Molson Coors (TAP), Constellation Brands (STZ), The Coca-Cola Company (KO), and Anheuser-Busch (BUD) in his quick analysis of company prospects in capitalizing on the hard seltzer trajectory.

Zacks provides independent research to investors, along with its Zacks Rank stock-rating system. Their returns over a period from 1988 through October 5, 2020, posted an average gain of +24.4% per year. Considered a retail investor firm along with Morningstar, Valueline, and others, they provide advice to shareholders of individual securities.

Boston Beer was “was one of the first real players in the now-booming space alongside White Claw,” wrote Rains. He notes that the continued growth of the hard seltzer market has “forced” Big Beer to the table, innovating new formidable hard seltzer competitors, such as Bud Light Seltzer, Vizzy, and Corona Hard Seltzer.

Significant is the analyst’s inclusion of Coca-Cola in the report, noting their introduction of Topo Chico hard seltzer catapults them into consideration of securities analysis when evaluating alcoholic beverage brands. Coke has launched the spiked version of its sparkling water brand in Europe, with the US launch by strategic partner Molson Coors planned for early 2021.

SAM Sticker Shock?

Rains calls Boston Beer the “Bull of the Day” today, explaining that their high stock price still has room for growth. Yesterday’s closing price was about $956, up from a 52-week low of $290 per share. “But it currently trades 10% below its October highs,” he encourages.

He believes the stock is actually trading at prices below its real value, hence the reason for being bullish. “The stock also trades at a big discount compared to its industry,” the report continued.

Brokerage firms agree with Zacks Rank (#1) Strong Buy. Over half of eight brokerage recommendations Zacks has for SAM rate it as a “Buy” or “Strong Buy.”

Still Early Days

The category hasn’t found its ceiling, another reason stock in Truly may be a good bet. New entries are coming fast, with 2021 seeing at least 10 new significant launches.

“The hard seltzer revolution is still in its early days,” said Rains.

Aiden Gentson
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