Please ensure Javascript is enabled for purposes of website accessibility

Why Boston Beer Stock Gained 17% in March

By Demitri Kalogeropoulos - Updated Apr 6, 2021 at 2:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the beer brewer have been rallying over the past year.

What happened

Boston Beer (SAM -1.06%) shareholders beat a rallying market last month. The stock rose 17% in March, compared to a 4.2% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

With that, the alcoholic-beverage specialist is up more than 10% so far in 2021 after having trounced the market last year.

Two people clinking beer glasses in a toast.

Image source: Getty Images.

So what

The stock gained more love from Wall Street pros in March, with an analyst at Goldman Sachs issuing an elevated price target late in the month. Investors have been impressed with Boston Beer's market-trouncing sales growth despite some difficult selling conditions. Depletions, a measure of consumption, jumped 37% last year thanks to booming demand for the Truly and Twisted Tea brands. Expectations are high for the company to repeat that stellar performance in 2021.

Now what

With an earnings report likely in late April, investors won't have to wait long to learn whether Boston Beer is meeting those goals. That announcement will add clarity to the company's growth expectations. In its most recent guidance, management gave a wide estimate for depletions, projecting an increase of between 35% and 45% in 2021.

An updated forecast near the high end of that range would support the stock's rally. But there are also big risks to the bullish thesis, including mounting competition in the hard seltzer space and weak profit margins as Boston Beer prioritizes growth over earnings.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boston Beer Company, Inc. Stock Quote
The Boston Beer Company, Inc.
$354.50 (-1.06%) $-3.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.