Molson Coors's Stock Bounces After Analyst Upgrade

MarketWatch Pulse

Beer brewer Molson Coors Brewing Co.'s stock climbed 2.1% in afternoon trade Thursday, in the wake of an upgrade at Morgan Stanley, which cited a "compelling" risk-versus-reward profile follow the recent pullback in price. Analyst Dara Mohsenian raised his rating to overweight, after being at equal weight the last 11 months, and lifted his stock price target to $83 from $81. Since closing at an all-time high of $78.67 on April 8, the stock had dropped 7.2% through Wednesday. Mohsenian believes consensus earnings-per-share expectations are now reasonable following recent downward revisions, and sentiment has become too negative. The second-quarter FactSet EPS consensus has fallen to $1.33 from from $1.46 at the end of 2014, while short interest, or bearish bets on the stock, increased 83% during the same time. "U.S. expectations are low, and a muted potential U.S. macro-driven recovery could now be more favorable than the market expects," Mohsenian wrote in a note to clients.

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