Shares of Boston Beer Explode to New Intraday All-Time High After This

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The maker of Samuel Adams and Truly hard seltzer, Boston Beer, was hitting a brand new all-time high on Friday after the company raised its guidance.

Shares jumped as much as 18% on Friday and the stock has rallied nearly 190% so far this year.
It was on Thursday that the company reported its third quarter financial report and beat what Wall Street had been expecting on earnings per share.

Earnings per share was reported at $6.51, which came ahead of Wall Street forecasts of $4.63, according to FactSet. Revenues of $492.8 million represented a 30% increase from the same quarter last year. It was below what analyst had expected however at $519.5 million.

Looking ahead, Boston Beer now expects shipments and depletions, which measures products sold from distributors to retailers, to be up between 37% and 42% this year. Previous forecasts anticipated an increase of between 27% and 35%.

The company is also expecting shipments and depletions to grow between 35% and 45% in 2021. This beat Wall Street’s projections of a roughly 30% increase, according to analysts at Jefferies.

Jefferies has a $575 price target on the stock with an “underperform” rating citing competitive risks in the red-hot hard seltzer category and their belief shares are “priced for perfection.”
Analysts at Deutsche Bank has reiterated a “hold” rating on shares but raised their price target to $996 from $835. In a note to clients, the analysts described the company’s third quarter as “relatively mixed.”

President and CEO David A. Burwick said on the earnings call, “Our depletions growth in the third quarter was a result of increases in our Truly Hard Seltzer and Twisted Tea brands, partly offset by decreases in our Sam Adams, Angry Orchard and Dogfish Head brands. The growth of the Truly brand, led by Truly Lemonade Hard Seltzer, continues to be very strong and we expect the Truly brand to continue to lead the growth of the business into 2021.”

“In early 2021, we will launch Truly Iced Tea Hard Seltzer, Truly Extra, a higher ABV version of Truly, and other new Truly flavors and package sizes, as we continue to lead innovation in the hard seltzer category. We believe that Truly Iced Tea Hard Seltzer, which combines the refreshment of hard seltzer with real brewed tea and fruit flavor at only 100 calories and 1 gram of sugar, will further strengthen our position in the category. Since early in 2020, Truly has grown its velocity and its market share sequentially despite other national, regional and local hard seltzer brands entering the category. Truly is the only national hard seltzer, not introduced earlier this year, to grow its share during 2020,” he said.

“We will continue to invest heavily in the Truly brand and work to improve our position in the hard seltzer category as competition continues to increase. We will also continue to invest heavily in our Live Truly advertising campaign that showcases, variety, colors and joy to hard seltzer drinkers,” he added.

“For the remainder of 2020 and into 2021, we plan to build upon our success and work to drive our brands to their full potential, with a particular focus on our Truly brand. We’ve adjusted our expectations for 2020 full-year depletions growth and our earnings guidance to reflect our trends for the first nine months and our current view of the remainder of the year, which is primarily driven by the year-to-date performance of Truly. We are expecting all of our brands to grow in 2021 and are targeting overall volume growth rates,” projected the CEO.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.