Why Boston Beer (SAM) Stock Is Falling Today

Petr Huřťák /
2024/06/03 11:27 am EDT

What Happened:

Shares of beer company Boston Beer (NYSE:SAM) fell 11.7% in the pre-market session after a Suntory Holdings spokesperson said it's not in talks to purchase the company (Boston Beer). This clarification followed the report by The Wall Street Journal on Friday, May 31, 2024, that Suntory was in early talks to acquire Boston Beer.

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What is the market telling us:

Boston Beer's shares are somewhat volatile and over the last year have had 6 moves greater than 5%. But moves this big are very rare even for Boston Beer and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 3 months ago, when the stock dropped 15.8% on the news that the company reported fourth-quarter results with revenue, and EPS missing analysts' expectations. The topline growth continued to decrease in absolute terms, led by a 9% drop in Depletions (due to declines in Truly Hard Seltzer, partially offset by increases in Twisted Tea and growth in Samuel Adams Non-Alcoholic styles and Dogfish Head Canned cocktails.) and a 12.2% drop in Shipments. Free cash flow also came in weaker. Looking ahead, guidance was barely convincing as the company expects Depletions and Shipments to be down low single-digit to up low single digit. Overall, this was a mediocre quarter for Boston Beer.

Boston Beer is down 12.1% since the beginning of the year, and at $299.18 per share it is trading 24% below its 52-week high of $393.71 from October 2023. Investors who bought $1,000 worth of Boston Beer's shares 5 years ago would now be looking at an investment worth $945.32.

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