Boston Beer (SAM) continues to face weak volume growth despite solid gross margin expansion, with Sun Cruiser remaining a key growth driver while Twisted Tea and Truly struggle, RBC Capital said in a Friday note.
According to the note, Q3 gross margin rose 90 basis points to 51.7%, beating the 51.1% consensus, as pricing, product mix and cost savings offset mixed brand performance. Depletions fell 5%, indicating no broad-based volume recovery, the note said.
RBC also noted that Boston Beer raised the lower end of its 2026 adjusted EPS guidance to $9, narrowing the range to $9 to $10.50, and lowered its tariff cost estimate to $18 million to $22 million, following a $3 million refund, while targeting roughly flat advertising and promotion spending year over year.
The brokerage lowered its 2027 volume outlook to a 1.3% decline from a 0.5% decline, citing slowing Sun Cruiser growth, weakness in Twisted Tea and Truly, and freight cost pressures, partly offset by potential cost savings. Boston Beer plans to provide 2027 guidance in February 2027, the note said.
RBC maintained its sector perform rating on the stock with a price target of $190.
Price: 195.47, Change: -0.25, Percent Change: -0.13
