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Boston Beer (SAM) Q4 Earnings: Stock to Disappoint Again?

Zacks

The Boston Beer Company, Inc. SAM is scheduled to release fourth-quarter 2016 results on Feb 22. The big question facing investors is, whether this largest U.S. craft brewer will be able to deliver a positive earnings surprise in the quarter to be reported.

Last quarter, the company delivered a negative earnings surprise of 2.4%. Also, in the trailing four quarters Boston Beer underperformed the Zacks Consensus Estimate by an average of 8.4%. Further, a look at Boston Beer’s earnings estimates revisions shows that the Zacks Consensus Estimate for the fourth-quarter and 2016 has remained stable for over the last 30 days. The current Zacks Consensus Estimate for the fourth quarter is $1.24 per share, which reflects year-over-year growth of 2.1%. Also, analysts polled by Zacks expect revenues of $225.8 million, up about 5% from the year-ago quarter.

Boston Beer Company, Inc. (The) Price and EPS Surprise

Boston Beer Company, Inc. (The) Price and EPS Surprise | Boston Beer Company, Inc. (The) Quote


Factors Influencing this Quarter

Boston Beer is facing troubles at its Samuel Adams brand due to stiff competition in the craft beer space as well as weakness in the cider class. This resulted in soft depletion trends and lower shipments in third-quarter 2016, wherein both the top line and bottom line dropped year over year, alongside lagging the Zacks Consensus Estimate. Further, taking into account the year-to-date trends and future projections, the company trimmed its earnings and depletions outlook for 2016.

Boston Beer has underperformed the Zacks categorized Beverages – Alcoholic industry in the past one year. Evidently, its shares have declined 10.8% over the past one year compared with the industry’s growth of 8.1%.


While the company remains committed to its three point growth plan, the aforementioned factors make us quite apprehensive of Boston Beer’s upcoming results.

Earnings Whispers

Our proven model does not conclusively show that Boston Beer is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Boston Beer is currently pegged at 0.00%. This is because, both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.24. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Boston Beer carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Papa John's International, Inc. PZZA, expected to release earnings on Feb 21, currently has an Earnings ESP of +4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco Wholesale Corporation COST, scheduled to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.

Dollar Tree, Inc. DLTR, expected to release earnings on Mar 7, currently has an Earnings ESP of +0.75% and a Zacks Rank #2.

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