Here’s which beer maker is the clear winner to buy

On May 31, 2023

In a battle of beer makers, Molson Coors (TAP) has had the advantage lately over rival Constellation Brands (STZ). But the maker of Corona and Modelo is our pick to win the bigger war. Here’s the tale of the tape. Molson Coors has a diverse portfolio of popular beer brands including Coors Light and Miller Lite as well as other summer favorites Blue Moon and Leinenkugel’s. Shares of TAP have gained about 17% in 2023, driven by strong beer growth and strategic partnerships. Backlash over Bud Light’s market campaign with a transgender influencer had led to boycotts and increased sales at competitors like TAP and STZ. Bud Light is made by Anheuser-Busch Inbev (BUD), whose stock has really fallen off a cliff since early May. TAP STZ YTD mountain Molson Coors vs. Constellation Brands YTD performance At Club holding Constellation, its core beer brands are Corona, Modelo and Pacifico. But in addition to those Mexican favorites, it also has a wide selection of wine and spirits under its umbrella. STZ shares have gained just over 2% in 2023 compared to the S & P 500 ‘s year-to-date rise of 9.5%. The stock has been hampered by volatility in beer volume trends, resistance to increased retailer pricing, and poor weather in key markets over the past few quarters. With Bud Light out of favor with a large portion of its customer base, many beer drinkers are instead buying more Miller Lite and Coors Light from TAP and more Corona and Modelo from STZ. “I think that Constellation is gaining share at a time when people thought that Corona Light had been running out of steam,” Jim Cramer said recently. While Mexican imports also had a tough start to the year, recent beer data from Nielsen shows Constellation’s beers saw 9.6% sales growth over the last four weeks and TAP grew 15.9%. Sales of BUD’s beer brands fell 12% over the same period. Roth MKM analysts agreed with Jim and put some context around the rosier STZ backdrop. In a research note Tuesday, they pointed to expected market share gains for Constellation’s Modelo Especial and Corona as the weather around the nation improves and the Bud Light situation plays out. “The opportunity to capture brand switching is massive in the summer months,” the analysts said. “For April, much of Bud Light share losses went to other premium light products, but substitution should shift seasonally into STZ’s favor,” they added. Roth MKM upgraded STZ to a buy rating from neutral while increasing its price target to $270 per share from $216. That new PT is nearly 16% higher than Friday’s close. After breaking down the profitability profile and growth plans of each company, we found Constellation Brands is much better positioned for the long term compared to Molson Coors and other top beer players in the industry. That, coupled with a recent mini-pullback in the stock led us to add 20 more shares of STZ last Thursday. STZ saw a small bump Friday and then rose 1.8% on Tuesday after the long Memorial Day weekend to close at $237….