USA: Molson Coors shares fall on downgrade
The shares of Molson Coors Brewing Co. declined as an analyst downgraded the brewer and maker of Coors Light a day before the company's first-quarter earnings report and as the company's stock rose above the analyst's price target, Associated Press reported on the 1st of May 2006.
Molson Coors shares, which hit a 52-week high of $74.10 on Friday, have gained nearly 8 percent since the start of the year.
The beverage analyst Mark Swartzberg cut his rating on Molson Coors Brewing a day ahead of the beer company's first-quarter earnings report, pointing to recent strength that has pushed shares past his $72 price target.
Citing valuation, Swartzberg reduced his rating on the firm to "hold" from "buy," even while asserting that sales in Canada -- Molson Coors' biggest profit center -- figure to be strong this quarter.
Molson Coors shares have rallied 15% since March 1. Swartzberg's forecast, a penny higher than consensus estimates, calls for the company to earn 14 cents per share for the first quarter.
"Share price strength has made valuation less attractive, but we continue expecting growth in Canada after a 2005 which began with profit declines but which stabilized by year end," Swartzberg wrote in a client note.
He cited a recent declaration from Anheuser-Busch execs last week estimating that beer volumes in Canada rose 3% during the first quarter from the year-earlier period.
Swartzberg predicts 26% first-quarter profit growth for the company in Canada, but noted that strength could be offset by a wider-than-expected losses in the UK.
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