Molson Coors Beverage Company (TAP): A Bull Case Theory

We came across a bullish thesis on Molson Coors Beverage Company on slo capital’s Substack by Justin. In this article, we will summarize the bulls’ thesis on TAP. Molson Coors Beverage Company’s share was trading at $49.22 as of August 5^th. TAP’s trailing and forward P/E were 9.90 and 8.08, respectively according to Yahoo Finance.

Molson Coors (TAP) is trading at a market cap of about $9.8 billion, far below its estimated $16 billion book break-up value, creating a deep value opportunity. The company owns iconic brands like Coors Light, which alone could be worth $8–9 billion at typical 8–10× EBITDA multiples seen in beer M&A deals, nearly covering the entire current market cap. Its other strong brands, including Miller Lite, Blue Moon, and Simply Spiked, reinforce Molson Coors’ competitive moat through entrenched shelf space, national logistics, and sticky consumer habits, as evidenced by Coors Light and Miller Lite retaining over 80% of share gains following the Bud Light controversy.

Under CEO Gavin Hattersley, the company has executed its Acceleration Plan by premiumizing its portfolio, reducing leverage to 2.1× net debt/EBITDA, restoring and growing its dividend at a 3.9% yield, and generating $1.24 billion in free cash flow in 2024, translating to a robust 12%+ FCF yield. At approximately 8.5× underlying pre-tax earnings, TAP trades well below peers at 15–18× EV/FCF, signaling significant upside potential, particularly if volumes rebound or a strategic buyer emerges.

Risks include flat overall beer consumption, input cost volatility, and execution challenges in beyond-beer segments, but hedging programs, pricing power, and disciplined capital allocation mitigate these concerns. With sustainable dividends, opportunistic buybacks, and a conservative reinvestment strategy, Molson Coors offers a compelling case of paying “yard sale prices” for a 150-year-old portfolio of enduring brands. The risk/reward profile suggests substantial rerating potential once the market recognizes the intrinsic value of these assets.

Previously, we covered a bullish thesis on Molson Coors Beverage Company (TAP) by Tyler Moody in September 2024, which highlighted its stable mid-cap status, conservative financing, and modest undervaluation based on operating profits and DCF analysis. The stock has depreciated about 11% since then, but the thesis holds due to defensive characteristics. Justin shares a similar view but stresses deep value, premiumization, and strong free cash flow.

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Disclosure: None.