Molson Coors (TAP) Bearish Setup: Time to Buy Puts?

Molson Coors Beverage Company is a global brewer and beverage company. Its core business involves producing, marketing, and distributing a diverse portfolio of owned and partner brands. Key brands include 'Coors Light', 'Miller Lite', 'Coors Banquet', 'Molson Canadian', 'Carling', 'Ožujsko', 'Madrí Excepcional', 'Staropramen', 'Blue Moon Belgian White', and 'Leinenkugel’s Summer Shandy'. The company also offers flavored beverages like 'Vizzy Hard Seltzer', spirits like 'Five Trail' whiskey, and non-alcoholic beverages. Molson Coors targets a wide range of consumer segments and occasions through its brands, which are categorized into Above Premium, Premium, and Economy segments. The company differentiates itself by focusing on consistently growing core power brand net sales, aggressively premiumizing its portfolio, scaling and expanding in beyond beer categories, and investing in capabilities and supporting its people, communities and planet. Its go-to-market strategy varies by geographic region due to differing regulations.

The short-term outlook for TAP (Molson Coors) is slightly negative. The primary driver is the Needham analyst's decision to maintain a 'Buy' rating but lower the price target from $58 to $54. While a 'Buy' rating is generally positive, the lowered price target suggests some reservations about the company's near-term performance. This revision could signal concerns about sales, profitability, or broader market conditions impacting Molson Coors. The upcoming earnings report also introduces uncertainty. While the article itself provides no information, earnings reports are always a significant catalyst, and the market's reaction will depend on whether the actual results meet, exceed, or fall short of expectations. Given the lowered price target and the inherent uncertainty surrounding the earnings release, a slightly bearish outlook is warranted for the next 1-2 weeks. Options traders should consider strategies that profit from a potential price decrease or increased volatility. Absent further positive news, TAP is likely to experience downward pressure.

TAP's technical outlook is bearish, with a score of 0.25. The recent price action confirms a downtrend, with the price declining from approximately $50 to $43.61 over the past 90 days. The price is currently below its 21-day EMA of 45.34 and its 50-day SMA of 46.93, reinforcing the bearish sentiment. The 200-day SMA, while present in some historical data, is not consistently available and therefore less reliable, but its presence at 52.58 indicates an even longer-term downtrend. Momentum indicators also signal weakness. The MACD at -0.848 is well below its signal line (-0.599), and the RSI is at 30.17, indicating oversold conditions, which can sometimes precede a bounce, but in this case, it is just reinforcing the bearishness. The ADX is elevated at 25.36, suggesting a strong trend is in place. The Stochastic Oscillator is at 9.58, also indicating oversold conditions. Overall, the combination of negative price action, bearish moving average positioning, and weak momentum suggests continued downward pressure on TAP in the coming 1-3 months. There are no immediate indications of a reversal.

Molson Coors' MD&A paints a concerning picture, driven by market headwinds and significant impairment charges. `Net sales` decreased by 2.3% for the three months ended September 30, 2025, compared to the prior year, and 4.6% for the nine months, primarily due to lower financial volume. `Gross profit` also declined, decreasing by 2.4% to $1,173.5 million for the quarter. The Americas segment experienced a 3.6% decline in net sales, while EMEA&APAC saw a modest increase of 2.4%. A major factor impacting profitability was the goodwill impairment charge of $3,645.7 million in the Americas segment and a $198.6 million impairment in EMEA&APAC, significantly impacting 'income (loss) before income taxes'. From a liquidity perspective, 'net cash provided by operating activities' decreased by $172.1 million to $1,243.7 million for the nine months ended September 30, 2025. The company is taking steps to restructure its Americas segment, planning to eliminate approximately 400 salaried positions, with restructuring charges estimated between $35 million and $50 million. Management acknowledges 'increased consumer and economic uncertainty' due to global macroeconomic volatility and heightened competitive activity, particularly in the U.S. beer industry. The company is also navigating rising aluminum prices due to tariff announcements, which are negatively impacting results. The CEO succession adds another layer of uncertainty, although the transition plan is in place.

Molson Coors' Q2 earnings call reveals a bearish outlook, primarily driven by a weaker-than-anticipated U.S. beer industry and unexpected cost pressures. CEO Gavin Hattersley acknowledged that the company is 'reducing our top and bottom-line guidance for 2025.' Net sales revenue is now expected to decline 3% to 4%, a downward revision from the previously projected low single-digit decline. Underlying pretax income is anticipated to decline 12% to 15%, a stark contrast to the earlier forecast of a low single-digit decline. This revision is largely attributed to a significant spike in the Midwest Premium for aluminum, which jumped 'to $0.68 per pound, an increase of over 180% since January.' While the company reaffirms its underlying free cash flow guidance of $1.3 billion, this is primarily due to higher cash tax benefits and favorable working capital offsetting the decline in pretax income. The company's share performance also 'did not meet our expectations,' contributing to the revised guidance. Despite strong performance from core brands like Coors Banquet and premiumization efforts in EMEA and APAC, the challenging macro environment and cost headwinds are expected to weigh heavily on the company's performance in the near term.

TAP's financial performance presents a mixed picture over the analyzed period. Revenue has fluctuated, starting at $2,596.4M in Q1 2024 and ending at $2,973.5M in Q3 2025, with a peak of $3,252.3M in Q2 2024. Gross profit margins have also varied, ranging from 0.369 in Q1 2025 to a high of 0.408 in Q2 2024, before settling at 0.394 in the latest quarter. Operating cash flow has been inconsistent, starting at $25.4M in Q1 2024, peaking at $869.2M in Q2 2024, and then declining to $616.1M in Q3 2025. Total debt has remained relatively stable, fluctuating between $6,192.8M and $7,055.7M, but ending at $6,292M in Q3 2025. The significant net loss of $2,927.6M in the most recent quarter is a major cause for concern, contrasting sharply with previous quarters that showed net income. Overall, the inconsistency in profitability and the large net loss raise concerns about TAP's near-term financial health.

The company presents a moderately bullish investment profile based on its financial data. Revenue has shown positive growth, indicating increasing market demand or successful market penetration. The gross margin is healthy, suggesting efficient cost management in production or service delivery. A strong return on equity (ROE) signals effective utilization of shareholder investments to generate profit. The price-to-earnings (P/E) ratio suggests the stock is trading at a premium, but this could be justified by the company's growth prospects and profitability. A manageable debt-to-equity ratio indicates a reasonable level of financial leverage. The current ratio, being greater than 1, demonstrates the company's ability to cover short-term liabilities with its current assets, further solidifying its financial health. Overall, the combination of revenue growth, healthy profitability metrics, and a solid balance sheet makes the company an attractive investment for the next 12 months, although the elevated P/E ratio warrants careful monitoring.