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

We came across a bullish thesis on Molson Coors Beverage Company on Cundill Deep Value’s Substack by FRAGMENTS. In this article, we will summarize the bulls’ thesis on TAP. Molson Coors Beverage Company’s share was trading at $46.91 as of December 1st. TAP’s trailing and forward P/E were 9.11 and 8.12 respectively according to Yahoo Finance.

Molson Coors (TAP) represents the quintessential “boring business” that quietly delivers consistent cash flow. Despite investor pessimism over beer demand and aluminum premiums, the underlying business remains robust, powered by a reliable route-to-market system and durable brand portfolio.

Even after management trimmed its 2025 outlook amid aluminum cost spikes and category softness, TAP reaffirmed about $1.3 billion in free cash flow—roughly $6.48 per share—underscoring its resilience as a cash engine. The equity appears mispriced, with Base value estimates around $68–$76 and Bull scenarios approaching $88–$94 as cost resets flow through and input pressures ease.

The market’s error lies in extrapolating temporary conditions into permanence. TAP’s brand assets—Coors, Miller, Carling, and others—carry more than 15% fair-value headroom over book value, supported by roughly $8.85 billion in physical assets and an entrenched distribution network that cannot be replicated cheaply. Management’s response to near-term headwinds has been measured: acknowledge softness, protect cash, then reset operations through a ~9% Americas headcount cut and leadership transition to new CEO Rahul Goyal. These actions should embed savings into 2026 earnings.

Even with modest volume trends, TAP maintains steady pricing, disciplined capex, and active capital returns—around $500 million in 1H25 via dividends and buybacks. The company’s leverage of ~2.4× EBITDA and clean balance sheet provide flexibility for sustained payouts. With economic asset value implying a $40/share floor and cash yields exceeding 10%, TAP’s current mid-$40s share price undervalues its durable moat. As aluminum costs normalize, the “boring” business model should re-rate, rewarding investors who buy the cash register at a boredom multiple.

Previously we covered a bullish thesis on Molson Coors Beverage Company (TAP) by Tyler Moody in September 2024, which highlighted stable operations and conservative valuation. The stock has depreciated about 15.23% since our coverage due to cost pressures, but the thesis remains valid as a defensive cash generator. FRAGMENTS shares a similar view, emphasizing TAP’s undervalued free cash flow strength.

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Disclosure: None.