Jefferies analysts raised the firm's price target on Constellation Brands (NYSE:STZ) to $293 from $285 and Molson Coors Brewing (NYSE:TAP) to $75 from $74 n a note to clients on Tuesday, maintaining Buy ratings on the stocks.
The analysts said the firm remains positive on U.S. beer as their Spring 2023 Beer Distributor Survey suggests the "Bud Light saga may endure."
"Protracted BL demand weakness is expected to linger according to ~65% of distributor respondents, which expect the controversy to last > 6 mos. (incl. 1/3 that expect a permanent lapse in BL consumers)," wrote the analysts.
As a result, they see "clear contagion to other AB brands, which is evident in Nielsen data," while TAP's Coors Light and Miller Lite have been the clear beneficiaries.
Elsewhere, the analysts stated that depletion trends are improving, while the summer trade promotion is expected to intensify.
"April/May depletions have improved vs. 1Q, according to 55% of distributors with TAP/STZ clear winners as AB's trends wane," said the analysts.