NEW YORK (AP) -- Shares of three beer and bourbon makers rose on Thursday after upgrades by an analyst who wrote that they should benefit from demand trends and other factors.
Stifel analyst Mark Swartzberg upgraded bourbon bottler Beam Inc. and beermakers Constellation Brands Inc., and Molson Coors Brewing Co. to "Buy," from "Hold."
Demand for bourbon is growing and Beam is "exposed to continued improving industry trends," Swartzberg wrote. There's a high probability that Beam will be bought, but even if it's not, its stand-alone prospects look good. He set an $80 price target on the Deerfield, Ill., company's stock. Beam shares were up 39 cents to $69.02 in afternoon trading. Over the past year, the stock has traded between $52.69 and $69.78.
Constellation Brands, based in Victor, N.Y., is set to benefit from adding production for U.S. sales of Corona and other beers now made by Mexican brewer Grupo Modelo. Grupo Modelo is being acquired by Anheuser-Busch InBev, but agreed to hand over some of its operations to competitor Constellation to settle antitrust concerns.
Constellation investors should benefit from increasing demand for premium beer even as overall beer consumption declines. Also, cost savings could improve profits, Swartzberg wrote. He set a $64 price target. Constellation shares rose $1.64, or 3.3 percent, to $51.88 in afternoon trading. Shares have rallied 47 percent in the year to date.
Molson Coors should also benefit from cost savings expected to be outlined at an annual analyst meeting planned for June 12, Swartzberg wrote. The Denver company should also be helped by improving trends in Europe, he wrote. He set a price target of $60. Coors shares were up $1.66, or 3.3 percent, to $52.72. The stock is up 23 percent in the year to date.