Boston Beer's (SAM) portfolio continues to underperform the weak beverage alcohol industry with persistent declines for Twisted Tea and Truly Hard Seltzer offsetting growth for Sun Cruiser vodka tea, Morgan Stanley said in a Friday research note.
While Sun Cruiser continues to grow close to triple digits recently, comparisons will get more challenging for the balance of the year as it cycles last year's national rollout, with growth slated to moderate further in 2027, according to the note.
Additionally, Morgan Stanley said that the company's efforts to improve Twisted Tea's performance through innovation, marketing, pricing and pack architecture have yet to turn the brand amid growth in spirits-based ready-to-drinks' share of display and consumption.
Morgan Stanley said it is lowering its fiscal 2026 and 2027 earnings per share estimates by 4% and 6.5% to reflect softer volumes only partially offset by lower advertising and promotional spending.
Morgan Stanley lowered its price target on the company's stock to $190 from $220 and maintained its equal-weight rating.
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