At US$55.71, Is Molson Coors Beverage Company (NYSE:TAP) Worth Looking At Closely?

Let's talk about the popular Molson Coors Beverage Company (NYSE:TAP). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$57.52 and falling to the lows of US$51.13. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Molson Coors Beverage's current trading price of US$55.71 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Molson Coors Beverage’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Molson Coors Beverage

What's The Opportunity In Molson Coors Beverage?

Great news for investors – Molson Coors Beverage is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 9.88x is currently well-below the industry average of 25.67x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Molson Coors Beverage’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Molson Coors Beverage?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Molson Coors Beverage, it is expected to deliver a negative earnings growth of -4.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although TAP is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to TAP, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on TAP for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Molson Coors Beverage as a business, it's important to be aware of any risks it's facing. Be aware that Molson Coors Beverage is showing 3 warning signs in our investment analysis and 1 of those is a bit concerning...

If you are no longer interested in Molson Coors Beverage, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.