Downgrade to Molson Coors and Constellation Brands due to sluggish beer consumption trends

Barclays downgraded Molson Coors Beverage Company and Constellation Brands to Underweight, citing sluggish trends in beer consumption, particularly among Hispanic consumers. The firm believes the beer category will be negatively impacted for an extended period.

Barclays has downgraded Molson Coors Beverage Company (NYSE:TAP) and Constellation Brands (NYSE:STZ) to Underweight, citing concerns over sluggish trends in beer consumption, particularly among Hispanic consumers. The firm believes the beer category will face negative impacts for an extended period.

The downgrade follows a series of disappointing summer selling seasons and economic strain on lower-income consumers and the Hispanic cohort, a key driver of industry sales. Barclays expects U.S. beer volumes to fall by about 5% in 2025 before moderating to a 2% annual decline in later years US beer sales slump on consumer strain hits Constellation and Molson Coors^[1].

Constellation Brands, which derives about 40% of its beer revenue from Hispanic consumers, faces added risk from immigration policy curbing social gatherings and surveys showing increased financial worries among Hispanic beer buyers US beer sales slump on consumer strain hits Constellation and Molson Coors^[1]. Molson Coors, which relies heavily on light beer brands, is seen as more vulnerable, while Constellation’s high-end Mexican portfolio offers relative resilience US beer sales slump on consumer strain hits Constellation and Molson Coors^[1].

Barclays has also trimmed its growth expectations for both companies, stating that industry malaise and shifting consumer habits leave little room for near-term recovery. Lauren Lieberman and her team at Barclays moved Constellation to Equal Weight from Overweight with a 25% cut to the target price, now at $150 Sluggish trends in beer consumption triggers downgrade to Molson Coors, Constellation Brands^[2].

The downgrades come as Molson Coors and Constellation Brands slipped on Friday, weighing on other brewers such as Boston Beer (SAM) and Anheuser-Busch InBev (BUD). Constellation shares hit a fresh low Sluggish trends in beer consumption triggers downgrade to Molson Coors, Constellation Brands^[2].