Boston Beer Co. soon may have to lower its expectations for the year as its hard-seltzer business “deteriorates further,” analysts at Goldman Sachs said Tuesday. The analysts downgraded their rating on Boston Beer
shares to sell, from the equivalent of hold, saying they see “an even greater negative risk/reward” balance for the hard-seltzer category.
Distributors are cutting down their hard-seltzer inventory further and drops in volume for Boston Beer’s Truly hard seltzer brand accelerate, which create more shelf-space losses at retailers and contributes to ongoing margin pressures, the analysts, led by Bonnie Herzog, said in a note. And Boston Beer’s Twisted Tea, the beverage maker’s “hard” ice tea introduced last year, may not be enough, the Goldman analysts said. “While distributor sentiment around Twisted Tea was generally positive, with most indicating significant future growth potential, we do not believe that Twisted Tea (or SAM’s other innovations) will be enough to offset Truly’s declines this year or next,” they said. Boston Beer executives may have to lower fiscal 2022 guidance across the board, including gross margin and per-shares earnings guidance, the Goldman analysts said. The analysts lowered their 2022 EPS estimate by 27% to $9.78, compared with management’s guidance of between $11 a share and $16 …