(Boston, MA) – Boston Beer Co. stock may have just had its worst day ever on the New York Stock Exchange.
Banking and financial services group, UBS, downgraded the nation’s largest craft brewer to a ‘sell’ rating from ‘neutral’ citing concerns around growth this morning. The UBS report reads, in part:
Boston Beer has demonstrated solid topline growth through successful innovations such as Twisted Tea and Seasonals. As these innovations mature, and with Boston Lager flat-to-down, new innovations such as Angry Orchard will need to match their predecessors’ impact to maintain revenue growth trends (Innovator’s Curse). We examine these dynamics, and conclude that topline trends will slow and thus drive SAM’s elevated PE multiple down.
The report sent Boston Beer’s stock price (NYSE: SAM) spiraling down. It started the day at $124.39 and plummeted to $114.66 at one point before lifting back up to $116.27 at closing time, a drop of 6.5% on the day. The stock price recently hit an all-time high of $128.07.
UBS isn’t the only one down on the stock. The Boston Globe also signaled a warning late last week, noting that the company was trading at a premium well above its peer group:
The shares are up more than 287 percent over three years, gaining nearly 18 percent so far this year. More important, Boston Beer shares trade for a bit over 30 times earnings, roughly double the valuation of brewing competitors. One last point of comparison: The Standard & Poor’s 500 index trades at a value of just 13.8 times earnings.
You can read the full 17-page UBS report at Brewbound.
On the bright side, the stock was up almost 300% since 2009!
Yes, I suppose that is why a stock would fall. What goes up sometimes comes down in the stock market.
Well a stock doesn’t always have to go up prior to falling as Facebook recently proved.
I’ll add this: while stocks go up and down not too many go up 300% in three years – ESPECIALLY – the last three years!
eh, doesn’t matter what the stock market does. As long as Sam is still in operation cranking out great beer who cares?
Pingback: Boston Beer Co. stock down 16% in less than four weeks | BeerPulse