What happened
Shares of Boston Beer Company (SAM +0.44%) gained 20.2% in June, according to data from S&P Global Market Intelligence, as trade tensions eased and the broader markets rebounded.
It certainly helped that after rallying 26% in the weeks following Boston Beer's strong first-quarter report in late April, shares pulled back hard from those highs along with the broader markets in May. This occurred despite a tailwind provided by the United States' decision to lift controversial tariffs on aluminum and steel imported from Mexico and Canada.
Image source: Boston Beer.
So what
At the same time, uncertainty surrounding tariffs on imported Chinese aluminum had served as a cost headwind to the brewing industry, though the effect has been more pronounced for industry juggernauts like A-B InBev and SABMiller, and less so for Boston Beer, which long favored glass bottles and only began shipping its wares on a limited basis in specially designed cans starting in 2013.
Nonetheless, as the U.S.-China trade war cooled and the markets rebounded last month -- including a 7% gain from the S&P 500 -- it was no surprise to see Boston Beer move even higher in the process.
That's not to say there was a complete lack of company-specific news in June, but it wasn't overwhelmingly positive. On June 10, Credit Suisse analyst Kaumil Gajrwala initiated coverage on Boston Beer with a neutral rating and $320-per-share price target, or almost exactly where shares traded at the time. To justify the firm's relative indifference with the stock already up around 36% year to date, Gajrwala pointed to concerns over Boston Beer's valuation and "instability" in the broader beer market.
Now what
Barring a preliminary update between now and Boston Beer's second-quarter results later this month, investors will need to wait for a refresher on the state of its business. But with the stock trading near a fresh all-time high right now, I think shareholders are right to raise their glasses to Boston Beer's performance last month.
