Boston Beer Company produces and sells alcohol beverages worldwide. The company sells approximately 60 beers under the Samuel Adams or the Sam Adams brands; 11 flavored malt beverages under the Twisted Tea brand; and 10 hard cider beverages under the brand Angry Orchard, as well as approximately 20 beers under other brand names. The company was founded in 1984 and is based in Boston, Massachusetts.
SAM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for SAM, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Boston Beer Co Inc ranked in the 17th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 80.33%. The most interesting components of our discounted cash flow analysis for Boston Beer Co Inc ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 214.15; that's higher than 95.51% of US stocks in the Consumer Defensive sector that have positive free cash flow.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately merely 8.79% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
SAM's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 52.53% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as SAM, try EPC, BF.B, PRMW, SDI, and IVFH.
Just four months from its release, Corona Hard Seltzer has already established a foothold in the competitive market for alcoholic seltzer drinks. Constellation Brands (NYSE: STZ) on Wednesday announced sales results for the young brand as part of its fiscal first-quarter earnings release.