Molson Coors Beverage Company TAP emerges as an attractive value opportunity in the Beverages - Alcohol industry, trading at a forward 12-month price-to-earnings ratio of 9.63, below the industry average of 15.98 and the Consumer Staples average of 17.89. The stock is undervalued compared with its industry peers, offering compelling value to investors looking for exposure to the Consumer Staples sector. Furthermore, TAP’s VGM Score of B underscores its appeal as a potential investment.

TAP Stock's P/E Valuation

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Molson Coors stock has been on an upward trend, gaining 19.1% over the past month. This growth outpaces the broader industry’s 15.9% return, it outperforms the consumer staples sector’s 5.7% increase and the S&P 500’s 5.1% dip in the same period.

TAP Stock Price Performance in Past Month

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Key Drivers of Molson Coors’ Recent Growth

TAP is strengthening its position as one of the largest brewers in the world, backed by a strong portfolio of well-established brands. The company remains focused on expanding its market share through innovation and premiumization. To accelerate portfolio premiumization, Molson Coors has been aggressively growing its above-premium segment in recent years. It has prioritized stabilizing some of its larger above-premium brands in the United States while exploring significant growth opportunities for key brands.

TAP is growing its business by strengthening its top brands. In the United States, Coors Light, Miller Lite and Coors Banquet kept more than 80% of their market share gains from the past two years. Coors Banquet grew 16% and has gained market share for 14 straight quarters. In Canada, Coors Light remains the best-selling light beer, helping the company grow its market share for 23 months in a row. In the U.K., Carling remains a top lager, while premium brands like Madrí in Europe and Caraiman in Romania are driving growth. Above-premium brands now make up 27% of total sales in 2024, and TAP has plans to expand further in the United States.

The company is on track with its revitalization plan, which is focused on achieving sustainable top-line growth by streamlining the organization and reinvesting resources into its brands and capabilities. The company intends to invest in iconic brands and growth opportunities in the above-premium beer space; expand in adjacencies and beyond beer, without hampering the support for its existing large brands; and create digital competencies for commercial functions, supply-chain-related system capabilities and employees.

Strategic Partnership Bodes Well

The strategic partnership with Fevertree Drinks plc, the leading supplier of premium carbonated drinks and mixers, allows TAP to expand its U.S. non-alcoholic portfolio. Under the agreement, TAP gains exclusive rights to sell Fever-Tree’s award-winning tonics, ginger beers and cocktail mixers in the United States, helping the company reach more consumers and diversify its offerings.

Molson Coors has strategic plans for Peroni and for expanding in the non-alcoholic category. The consolidation of ZOA will contribute to the top line. The company has obtained exclusive rights through a license agreement to make, market and sell Fever-Tree products in the United States. Such strengths will boost sales and increase profitability.

TAP Provides Optimistic FY25 View

TAP’s strong expansion strategy has played a key role in driving its growth. The company expects its sales to grow in the low single digits in 2025, with underlying earnings per share (EPS) rising in the high single digits. It also expects operating profit to grow in the mid-single digits, with planned price increases of 1-2% in North America and price adjustments in other markets based on inflation.

Molson Coors has retained most of its market share gains from 2023. It has grown across all price segments in Canada and has focused on premiumization in EMEA and APAC. The company has ended low-margin brewing contracts and exited small, unprofitable businesses to focus on stronger areas. A new project in the U.K. will expand brewing and packaging capacity, driven by strong demand for Madrí. Overall, favorable pricing, premiumization and higher brand volumes continue to support growth in key regions.

Estimate Revisions Favor TAP Stock

Analysts have responded positively to Molson Coors’ prospects, which has been reflected in upward revisions in the Zacks Consensus Estimate for EPS. In the past 30 days, analysts have increased estimates for the current fiscal year by 41 cents. The consensus estimate for earnings is pegged at $6.35 per share. The consensus estimate for earnings for the next fiscal year has been raised 63 cents to $6.77 per share. These estimates indicate expected year-over-year growth rates of 6.5% and 6.7%, respectively.

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Final Words on TAP Stock

Molson Coors’ strategic focus on premiumization, strong brand positioning and expansion into non-alcoholic beverages positions it for sustained growth. The company's market share gains, ongoing investments in high-margin segments and strategic partnerships, such as Fever-Tree, further enhance its long-term potential. With solid financial projections for 2025, continued pricing power and operational improvements, TAP presents a compelling investment opportunity. Currently, Molson Coors flaunts a Zacks Rank #1 (Strong Buy).

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