Susquehanna analyst Pablo Zuanic reiterated a Buy rating on Craft Brewers Alliance (BREW) today and set a price target of $21. The company’s shares opened today at $17.23.
Zuanic wrote:
“BREW shares are down 8% intraday following a disappointing quarter, and new guidance metrics that, taking the mid-point, imply EBIT for FY18 22% lower than originally implied (due to higher SGA, while the range for other metrics was tightened). But more than earnings (BREW trades at 49x our below consensus 35c), BREW trades on the probability of a BUD bid. At $17.15, the stock now offers 40% upside if BUD were to exercise its option to buy the company for $24.50 per share by end of August 2019 (presumably, BUD having recently signed a consent decree with the DOJ, related to the SAB deal, about a few operating restrictions, has more flexibility). We continue to think a bid makes sense for BUD. The implied EV of $480Mn (19.5Mn shares x $24.50; by then net debt should be zero) is equivalent to about $650 per barrel (well below the $1,000 BUD paid for other craft brands).”
According to TipRanks.com, Zuanic is a 4-star analyst with an average return of 6.0% and a 52.0% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Craft Brewers Alliance with a $21 average price target.
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Craft Brewers Alliance’s market cap is currently $359.2M and has a P/E ratio of 25.41. The company has a Price to Book ratio of 2.64.
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Craft Brew Alliance, Inc. is an independent craft brewing company, which engages in brewing, branding, and marketing of craft beers. It operates through the Beer Related Operations and Brewpubs Operations segments.
